Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — DEFENCE

Beira Patrol

Mr. Edward Taylor: asked the Minister of State for Defence if he will make a further statement about the Beira Patrol.

The Under-Secretary of State for Defence for the Royal Navy (Mr. Antony Buck): We are continuing to fulfil our obligation under the Security Council resolution to prevent the arrival at Beira of vessels reasonably believed to be carrying oil destined for Southern Rhodesia.

Mr. Taylor: Will my hon. Friend give an assurance that the Beira Patrol will be included in the defence cuts announced yesterday by my right hon. Friend the Chancellor of the Exchequer? Does he not agree that it is a piece of nonsense, and an insult to British industry which is now working a three-day week, that we should continue this pointless exercise—an exercise that achieves nothing since the Arab countries have said that they are sending no oil to Southern Africa?

Mr. Buck: My hon. Friend will appreciate that we are still bound by the United Nations resolution of 9th April 1966; but those on patrol will do all they can to conserve fuel.

Mr. Peart: Will the Minister reject the blandishments of his hon. Friends, because a moral obligation is involved and we are committed to the United Nations? [Interruption.] If hon. Gentlemen want anarchy they will get it, but we have made an arrangement and entered into an agreement.

Mr. Buck: What I have said covers the point. The resolution continues in

force and we shall do all we can to conserve fuel.

Mr. Goodhew: While the Navy is undertaking this work, can it not at the same time do something useful—that is to say, keep observation on the potential threat to this country of the activities of the Russian fleet in that area?

Mr. Buck: Observations of that character are indeed carried out by our ships in the area.

Mr. Rost: asked the Minister of State for Defence what is the annual cost and fuel consumption of the Beira Patrol.

Mr. Buck: I refer my hon. Friend to my answer on 14th December. It is not possible to quantify the costs of this operation compared with the costs of the duties on which the ships might otherwise have been engaged.—[Vol. 866, c. 206–7.]

Mr. Rost: As the Beira Patrol must now be desperately in need of a change of scenery, would it not be appropriate to end this farce and, in view of the national emergency, move the patrol to British home waters where it could blockade the tankers which are diverting oil which is desperately needed in England to more profitable markets overseas?

Mr. Buck: That is a rather large issue. As to a change of venue, this patrol is one of the many tasks carried out on a rotational basis by Royal Navy ships, east of the Cape, and the ships would not be idle if the Beira Patrol were discontinued.

Mr. Peart: Is the Minister aware that some hon. Members resent the practice of sniping at Service men who are engaged on this important task?

Mr. Buck: I had not appreciated that there was any sniping at the Service men involved in this task.

Mr. Marten: As our so-called partners in the Common Market are some of the biggest sanction-busters regarding Rhodesia, will my hon. Friend ask his right hon. Friend the Secretary of State for Foreign Affairs to ask the Council of Ministers to make a contribution to the cost of oil used on the Beira Patrol?

Mr. Buck: I shall confine myself to saying that I shall see that the words of


my hon. Friend are recorded and reported to my right hon. Friend.

Mr. William Hamilton: Is the hon. Gentleman aware that Conservative Members who consistently attack the Beira Patrol swore an oath of allegiance to the Crown? Does he agree that the patrol is doing its best to bring down a rebellion against the Crown? Are not some hon. Members engaged in a measure of treachery?

Mr. Buck: Nobody doubts the loyalty of my hon. Friends to the Crown. I am sure that the same can be said of Labour Members.

South Africa (Naval Co-operation)

Mr. Judd: asked the Minister of State for Defence whether he will make a statement on Her Majesty's Government's present policy towards naval co-operation with the South African Navy.

Mr. Buck: We continue to co-operate with the South African Navy in the context of the Simonstown Agreement.

Mr. Judd: Will the hon. Gentleman give an assurance that there is no intention of increasing the degree of cooperation with the South African Navy? Will he agree that, if there were any tendency in that direction, it would be unfortunate at a time when there is growing confrontation in the African continent since it might appear that we were aligning ourselves militarily with the forces of oppression in Southern Africa?

Mr. Buck: Our co-operation with the South African navy is broadly as it has been in past years. We have recently carried out a successful joint exercise with the South Africans, which I welcome.

Mr. Wall: Does not the present restriction in oil supplies underline the vital importance of the Cape route? Can my hon. Friend say when my right hon. hon. Friend the Prime Minister will carry out the promise he made when in Opposition to supply adequate arms for the maritime defence of the Cape route?

Mr. Buck: The second part of my hon. Friend's question is hardly a matter for me. In fact, he is absolutely right, since recent events show the importance of our oil routes and our vulnerability when our oil supplies are disrupted.

Mr. Frank Allaun: Does not the hon. Gentleman recognise the undesirable features of the supply of helicopters to South Africa? Will not this antagonise the whole African continent, including Nigeria?

Mr. Buck: The helicopters are being provided under legal obligations into which this country had entered. We have had no strong representations about this matter from other quarters. Matters of this character are for my right hon. Friend the Foreign Secretary.

RAF Aircraft (Damage)

Mr. Arthur Lewis: asked the Minister of State for Defence why by 3rd December 1973 the hon. Member for West Ham, North had not received a reply to his letter of 26th October regarding damage being caused by RAF planes; and whether he will expedite this reply and ensure speedier replies to his correspondence in future.

The Under-Secretary of State for Defence for the Royal Air Force (Mr. Anthony Kershaw): I wrote to the hon. Member on 3rd December. Correspondence is dealt with as rapidly as the subject matter permits; and in this particular case a detailed investigation was necessary.

Mr. Lewis: I am grateful to the Minister for writing me a letter after I had tabled a Question on this matter. Will he take it from me that it does not take a month to send a reply? Will he look into the matter again? When things of this sort happen, people are not always available to make notes of times and dates. If there is a responsibility falling on the Minister in this connection, will he look into the matter again?

Mr. Kershaw: I wrote to the hon. Member before he tabled his Question.

Mr. Lewis: It was dated the same day.

Mr. Kershaw: Yes, but it was before the Question was tabled. The hon. Gentleman's letter raises three rather substantial points. The first relates to sonic booms which, he believes, are knocking down his greenhouse. It is important if one has a greenhouse that it should not be knocked down by a sonic boom. Secondly, he raised the subject


of flights from RAF Coltishall. Thirdly, he raised the matter of the fuel crisis. All these matters are important and they needed investigation by three different sections of the Ministry of Defence. I have such respect for the hon. Gentleman that I was determined not to get the matter wrong, so it took a little time. On the question of sonic booms in particular, because of the large number of aircraft in our air space it takes a long time to find out which boom is sonic on a particular day.

Mr. Fowler: In view of the need to reduce public expenditure, could the hon. Member for West Ham, North (Mr. Arthur Lewis) be persuaded to reduce his output of Questions? Might not this result in speedier answers for us all?

Mr. Speaker: Order. That has nothing to do with sonic booms.

Fuel Conservation

Mr. William Hamilton: asked the Minister of State for Defence what plans he has for reducing the scale and number of military exercises in Scotland in the interests of fuel economy.

Mr. Wingfield Digby: asked the Minister of State for Defence what instructions have been given to the Armed Services for the conservation of oil supplies.

Mr. Pardoe: asked the Minister of State for Defence what recent instructions he has issued to the Armed Services, and in particular the Royal Air Force, about the need to conserve fuel.

Mr. Kershaw: I refer the hon. Members to the statement I made during the defence debate on 12th December.—[Vol. 866, c. 531.]

Mr. Hamilton: Has the hon. Gentleman's attention been drawn to the article in the Scottish Sunday Mail of 2nd December, in which it was indicated that defence exercises which had taken place during the previous week had consumed an estimated 2 million gallons of fuel? Will he undertake to stop this sort of thing forthwith? Can he tell us whether the aircraft sent to Glasgow from London in order to bring the Foreign Secretary back for a dinner in London was a military plane, how much fuel it used,

and whether he will stop that sort of thing as well?

Mr. Kershaw: I will write to the hon. Gentleman about the last point he raised. He referred to military exercises, and I remind him that it is necessary to keep our forces in a state of operational efficiency. While the exercises that the hon. Gentleman mentioned were looked at in particular, nevertheless it was decided that in the interests of efficiency they should go ahead.

Mr. Wilkinson: Will my hon. Friend refute the argument of 100 or so Labour Members who have tabled an early-day motion urging restriction of low-flying exercises? Is he aware that this is already done as much as practicable? Can he make those hon. Members aware that in the interests of flight safety, let alone operational efficiency, these exercises must continue?

Mr. Kershaw: I am obliged to my hon. Friend for what he has said. As I said in the defence debate last week, low-flying exercises are carried out no more than we can avoid because we know what a nuisance low flying is. Therefore, the room for further reduction is correspondingly small. It is certainly necessary to continue with low flying in the interests of operational capability and efficiency.

Mr. John Morris: While no one would question the need to keep the forces in a high degree of efficiency, is not the hon. Gentleman concerned that the forces are not carrying a proper share of the necessary fuel cuts, particularly in low flying, which is causing such great inconvenience—and this at a time when factories are to go on a three-day week in the New Year?

Mr. Kershaw: As I pointed out last week, we intend to try to achieve a 10 per cent. overall reduction, but there are some areas in which we do not feel it right, in the interests of national defence, to make cuts of that size. It may mean that overall we do not achieve the full 10 per cent., but we shall keep a close watch on the situation.

Mr. Strang: asked the Minister of State for Defence what representation he has received about the consumption of quantities of fuel through military exercises following the Government's appeal


to the public to cut back on energy consumption.

Mr. Kershaw: Several hon. Members have put down Questions and there is the early-day motion on the Order Paper. There have also been a few representations from members of the public.

Mr. Strang: Notwithstanding his earlier replies, it is a little disconcerting that the Minister suggests that he may not even be able to achieve a cut of 10 per cent. in fuel consumption. Will he outline the areas in which he feels it will not be possible to achieve a 10 per cent. reduction?

Mr. Kershaw: They are the areas where operationally it is undesirable to impose limits, such as Northern Ireland and areas in which a high degree of training is necessary to enable us to fulfil our operational rôle.

Mr. Soref: In view of the increasing murderous activities of traitors in Ulster and their agents nearer home up to and including today, may we have my hon. Friend's assurance that there will be no economy whatsoever that can affect the security of the people of this country and the defences of the nation?

Mr. Kershaw: I assure my hon. Friend that it is those duties that we have in mind in the allocation of fuel.

Riot Control Gas

Mr. Frank Allaun: asked the Minister of State for Defence what details of the nature and effects of the new chemical riot control agent, CR gas, officially authorised for use in the United Kingdom have been given in the appropriate scientific journals; and if he is satisfied that they meet the requirements of the Himsworth Committee.

The Minister of State for Defence (Mr. Ian Gilmour): A report on the nature and effects and the treatment of individuals contaminated with solutions of CR was published in Medicine, Science and the Law of October 1973. An annotation covering the same ground appeared in the British Medical Journal of July 1973. These are the first of a series of reports on the extensive medical and scientific research carried out on CR as a riot control agent which are being made available for

publication in scientific journals. I am satisfied that the steps taken to secure publication of the details of the nature and effects of CR are consistent with the recommendations of the Himsworth Committee.

Mr. Allaun: Because of the obvious dangers, did not the Himsworth Committee conclude that such details should be printed immediately in the relevant scientific Press? Is it not a fact that a number of eminent professors have protested that a brief paper has been published in only one obscure paper—the one to which the right hon. Gentleman referred—and that, therefore, the release of the gas officially is premature?

Mr. Gilmour: The hon. Gentleman will appreciate that we are unable to direct scientific journals as to what articles they will or will not publish. There is also a certain degree of delay in their publications. We have no control over that aspect either. I do not think that the hon. Gentleman's assumption is correct. As I have said, at least two articles have been published already.

Mr. Churchill: Will my right hon. Friend consider the possibility of stocks of CR gas, and such other weapons as he may feel necessary, being kept readily available at London Airport so as to guard passengers and employees there from the barbaric attacks to which passengers and airport employees were subjected only yesterday in Rome?

Mr. Gilmour: Some stocks of CR gas are available both in Northern Ireland and elsewhere in the United Kingdom. My hon. Friend will not expect me to specify the exact nature of the stocks or where they are kept.

Northern Ireland

Mr. Cronin: asked the Secretary of State for Defence if he will make a statement on the progress that has been made on improving the conditions of British soldiers in Northern Ireland.

The Under-Secretary of State for Defence for the Army (Mr. Peter Blaker): We are continuing to do all we can to improve the conditions of British soldiers in Northern Ireland. A mid-four break of 96 hours with free


travel is now available to those on four-month emergency tours. Progress continues to be made in improving accommodation. Two new swimming pools were completed this summer and two more are under construction. We are also spending £100,000 on launderettes, bowling alleys, sauna baths and squash courts, some of which have already been completed.

Mr. Cronin: Does the hon. Gentleman recollect that about a year ago there were reports in the Press of very poor conditions for our soldiers in Northern Ireland? Can he assure us that our soldiers there are now living in decent and comfortable circumstances? Can he also give an indication of the maximum number of tours that any soldier is likely to do in Northern Ireland?

Mr. Blaker: It is not possible to give any assurance about the maximum number of tours which any soldier or unit may have to do. The maximum number of emergency tours that any unit has done so far in Northern Ireland has been five, I believe.
It is not possible to say that all soldiers are in satisfactory accommodation in Northern Ireland. This, as the hon. Gentleman will realise, is the necessary consequence of the operational situation, because units have to be where the action is and that may vary from time to time. Between April and the end of November, however, we spent £4½ million on improvements to and maintenance of accommodation.

Major-General Jack d'Avigdor-Goldsmid: Is any consideration being given to the X factor in the pay code for soldiers serving in Northern Ireland, as I suggested in last week's defence debate?

Mr. Blaker: My hon. and gallant Friend will recognise that the X factor is intended to be of general application and not particularly for a situation such as that in Northern Ireland; but this and other related matters are subject to review.

Mr. Peart: In view of the importance of our troops in Northern Ireland, and speaking as one who has seen them operating and has been struck by their

fine morale, I ask the hon. Gentleman to resist any cut in expenditure which may be asked for by the Treasury on amenities and other matters for our troops in Northern Ireland which have been discussed already across the Floor of the House.

Mr. Blaker: I very much appreciate what the right hon. Gentleman has said. He has been a firm supporter of our troops in Northern Ireland, and I very much welcome that. We do not envisage that cuts in Defence Estimates for the coming year will have any effect on our capability in Northern Ireland. In bringing about further improvements, we shall continue to allot priorities where they are considered most appropriate.

Mr. Mather: asked the Minister of State for Defence if he is satisfied with the force levels currently deployed in Northern Ireland; and if he will make a statement.

Mr. Ian Gilmour: I am satisfied that the current force level in Northern Ireland is right. As I said in the defence debate on 12th December, we watch the situation constantly and very closely and the force level will be adjusted to meet whatever operational situation should arise.

Mr. Mather: Is my right hon. Friend satisfied that there is enough manpower available for operations on the border which take place over wide areas? Is he getting co-operation from his opposite number in the Republic on this matter? To make the best use of manpower, will he consider the formation of a Regular company for each Ulster Defence Regiment battalion, as this would be widely welcomed?

Mr. Gilmour: As my hon. Friend says, there is disquiet in the border areas about the incidents there, but they are the direct result of the success of the security forces in the Belfast area. The terrorists have been driven to making rather spectacular but less effective expeditions and excursions into the border area. I am sure that it would be wrong at this stage to move troops from Belfast to the border area, but we are certainly keeping this under review. We have looked at the formation of Regular companies for the UDR, but there are recruiting and other


difficulties. We are continuously considering this, but we are not at present satisfied that it would be the right thing to do. Even the conrates are not fully recruited.

Mr. Molloy: Is the Minister satisfied with the standards of liaison and the assistance given to the families of our soldiers in Northern Ireland who are wounded or killed?

Mr. Gilmour: I do not know that we can ever be fully satisfied about anything. We certainly do what we can, and our general record is very good. If the hon. Gentleman has in mind any particular case where we have fallen down, I shall be glad to look into it.

Mr. Stokes: Has my right hon. Friend considered the possibility that some of our forces in Northern Ireland might be required over here to keep essential services running?

Mr. Gilmour: No, we have no plans at all at present to withdraw troops from Northern Ireland to this country.

Mr. Biggs-Davison: asked the Minister of State for Defence whether he will make a statement about the operations in Northern Ireland.

Mr. Ian Gilmour: The security forces have played an important part in the creation of a climate in which recent political developments could take place. The fight against terrorism will continue so that constitutional progress can be maintained.

Mr. Biggs-Davison: In view of what has happened in Horseferry Road, does my right hon. Friend believe that the people of Great Britain are even more squarely behind our forces and our people in Northern Ireland in a struggle against terrorism which has no border? Is he fully satisfied, despite the recent encouraging co-operation from the South, that there is the fullest liaison not only between the RUC and the Civic Guards but between the Armed Forces of the United Kingdom and the Republic? Has not the time come for staff talks?

Mr. Gilmour: I agree entirely with the first part of my hon. Friend's question, except that I think the British people were already fully behind our forces in

Northern Ireland. There is a good deal of co-operation with the forces of the Republic, but obviously we always welcome any improvements that there might be.

Mr. Goodhew: Will my right hon. Friend tell the House whether supplies of Soviet arms into Northern Ireland for the use of the IRA are still continuing? If so, will he ask his right hon. Friend the Secretary of State for Foreign Affairs to see what he can do about the matter with his friends in Moscow?

Mr. Gilmour: We have no definite news of the arrival of Soviet arms in Northern Ireland. My hon. Friend will have seen Mr. Twomey's claim that he has sophisticated weapons. Naturally we are taking action against that eventuality.

Petroleum Industry Research and Development

Mr. Douglas: asked the Minister of State for Defence what assistance the Naval Construction Research and Development Establishment at Rosyth has given to the petroleum industry in the United Kingdom.

Mr. Buck: As much assistance as possible has been given, including advice, research and testing, within the limits imposed by the need for the Naval Construction Research Establishment to devote its resources primarily to the defence programme.

Mr. Douglas: Does not the Minister concede that, with the unique opportunity for the development of the North Sea, the special facilities of this establishment should be used to give advice on the design and testing of production platforms for the North Sea, that much more of the establishment's activity should be in the civilian field and that, if necessary, the establishment should be built up and expanded for that purpose?

Mr. Buck: I have great sympathy with the views expressed by the hon. Gentleman. If specific projects are put up by industry, they will be considered sympathetically.

Mr. Dalyell: Are not these limits another reason for the setting up of the


proposed North Sea environmental command outlined by Professor Erickson, to which I referred in the defence debate?

Mr. Buck: Again I have sympathy on that point, but we still await Professor Erickson's report. We look forward to receiving it and will give it our careful attention.

Mr Judd: In view of the massive expenditure on military research and development, does not the Minister agree that, in the context of the current crisis, it would be advantageous if the maximum possible resources were to be deployed on research into alternative sources of energy and on less energy-intensive means of production?

Mr. Buck: That is probably a good point, but it goes much wider than naval research. We are anxious that the facilities available should be utilised in the way envisaged by the hon. Gentleman.

Harrier Aircraft

Mr. Wall: asked the Minister of State for Defence if he will now make a statement on the employment of V/STOL aircraft at sea, and particularly in the new through-deck command cruisers.

Mr. Wilkinson: asked the Minister of State for Defence whether he will make a further statement on the proposed Royal Navy variant of the Harrier aircraft.

Mr. Ian Gilmour: I have nothing to add to what I said during the defence debate on 12th December.—[Vol. 866, c. 434–435.]

Mr. Wall: Is it not likely that these aircraft will be operating in the American, Spanish and even the French navies before operating in the Royal Navy? Is my hon. Friend aware that many people feel that these command cruisers will be a waste of money unless they operate with V/STOL aircraft? When will he be in a position to make a statement?

Mr. Gilmour: In reply to the first part of the supplementary question, with respect my hon. Friend is under a degree of misapprehension. The aeroplanes that are being used by the American Marines and that will be used by the Spanish

navy are the Harrier version that we have already, not the maritime Harrier. Obviously, we have now to look at our defence programme as a whole in the light of the emergency, and I cannot give a definite answer as to when we shall make an announcement.

Mr. John Morris: Have not the Government been dithering on this issue year in and year out? Is it not high time, one way or the other, that the Fleet Air Arm was put out of its misery? Will the right hon. Gentleman tell the House frankly that it is one of the casualties of the present cut-down and part of the £178 million?

Mr. Gilmour: That is untrue, because we have not yet made a decision. When we do we shall communicate it to the House. As I have said before now to right hon. Gentlemen on the Opposition Front Bench, they should be cautious of opening their mouths on this matter. On their defence policy, in so far as they have one, there is no question of the maritime Harrier being afforded.

Mr. Wilkinson: Will my right hon. Friend bear in mind that export sales of this aircraft could recoup the development costs? Furthermore, would it not be a dangerous precedent that would not go unnoticed in the Kremlin if industrial action in this country were so to disrupt the economy as to incur a unilateral cut in defence expenditure on critically important programmes like this?

Mr. Gilmour: As my hon. Friend knows, we are fully aware of the export potential of this fine aircraft, and it is certainly one matter that we have to take into account. On the second point, as I said before, we have to assess the priority of this aircraft against other equipment.

Mr. Dalyell: May I send a public message to the Chancellor of the Exchequer that each through-deck cruiser costs £120 million and that through-deck cruisers were considered by many naval officers to be vulnerable and not worth the money even before recent events?

Mr. Gilmour: I have noticed that even the hon. Gentleman's private communications become public. Unfortunately, I missed the hon. Gentleman's


speech in the defence debate in which he said that the Government had assented to that figure of £120 million, and I intended to write to him today about it. That figure of £120 million is not correct; it is purely his own figure.

Mr. Morris: Do I understand the Minister to say that he is still considering priorities? Does that mean that he does not know where the £178 million cut is to fall?

Mr. Gilmour: We do not know the exact details. Nobody pretends that we selected £178 million. The defence budget is making its contribution to the grave national emergency but, obviously, we cannot at this stage settle the exact details of the cuts.

Poseidon Submarines

Mr. Hugh Jenkins: asked the Minister of State for Defence if he will undertake that no decision to acquire a Poseidon submarine will be taken prior to full discussion in this House, having regard to the view of the Defence Subcommittee of the Expenditure Committee that it has seen no evidence that such acquisition would be worth while.

Mr. Ian Gilmour: I have nothing to add to what was said on this subject by my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force in the defence debate on 12th December.—[Vol. 866, c. 535.]

Mr. Jenkins: The Under-Secretary was rather vague about the matter, whereas I think the Minister will agree that the Committee was quite positive. It went rather beyond what is said in my Question. It said that the conversion to Poseidon should not be made. Is it not right and proper for us to ask the Government to give an undertaking that they will not embark upon any such conversion without full discussions in the House beforehand?

Mr. Gilmour: As the hon. Gentleman knows, this matter was covered by my right hon. and noble Friend in his evidence to the Select Committee. The hon. Gentleman knows that complex issues are involved. It would not be in the public interest to go into the details of those complex issues.

Mr. Paget: Surely the Minister can give an assurance. We are being told that we must make enormous cuts in capital expenditure. As Poseidon has to be obtained from America, surely it is not one of the Prime Minister's sacrosanct pets?

Mr. Gilmour: I do not accept the assumption or the imputation of the hon. and learned Gentleman. He will have seen my right hon. and noble Friend's answer to the Select Committee on this matter.

Mr. Jenkins: In view of the unsatisfactory nature of the Minister's replies, I give notice that I shall raise the matter on the Adjournment.

Married Quarters and Land (Gibraltar)

Mr. Money: asked the Minister of State for Defence what progress has been made in expediting the construction of Services married quarters and in particular the review of surplus land held by the Ministry of Defence in Gibraltar as recommended by the Third Report of the Expenditure Committee.

Mr. Ian Gilmour: Since publication of the recommendations of the Third Report of the Expenditure Committee, invitations to tender for 136 married quarters have been issued. It is hoped to start construction in May 1974.
The use of all land held by the Ministry of Defence in Gibraltar has been reviewed locally and the results of this review are now being examined by the Ministry of Defence and the Property Services Agency.

Mr. Money: Is my right hon. Friend aware of the extreme importance which the Gibraltar Government and the Gibraltar people place on the early relinquishing of MoD-held land and buildings which are no longer required for defence purposes? Is he aware of the need for Gibraltar to expand economic activity in the private sector to combat Spanish economic restrictions?

Mr. Gilmour: I agree that this is an important matter. However, there were over 100 sites to be examined. That could not be done immediately. We are looking at the results of the report.

Sir John Tilney: Taking into account how bad some of the married quarters are in Gibraltar, and the cost and the length of time taken to build permanent married quarters, will my hon. Friend consider the use of more mobile homes?

Mr. Gilmour: We are considering the possibility of improving the married quarters which are already there. We shall take advantage of my hon. Friend's suggestion and consider it.

Mr. Jeffrey Archer: Does my hon. Friend realise that in my constituency, at the station of North Coates, there are 240 married quarters which have not been used for the past three years? Will he make an early announcement about what will happen to that station?

Mr. Gilmour: This matter has come up on a number of occasions during previous Defence Questions. I do not think that my hon. Friend's constituency has much to do with Gibraltar.

Equipment Expenditure

Mr. John Morris: asked the Minister of State for Defence if he will make a statement on current defence equipment expenditure and on the economies now envisaged.

Mr. Ian Gilmour: As I said in answer to a Question by the right hon. and learned Gentleman on 22nd November, it is too early to make a reliable assessment of the expenditure on defence equipment that will take place in the current year. So far as economies in the future years are concerned, I am not yet in a position to give details of how the defence contribution of £178 million towards the savings in public expenditure next year announced yesterday by my right hon. Friend the Chancellor of the Exchequer will be made up.—[Vol. 864, c. 492.]

Mr. Morris: As the Minister, on his own confession, has little idea where the £178 million cut in defence expenditure is to be made, and as it is as a figure no more than one plucked from the air to placate the Treasury, will he reconsider the galloping expenditure on research and development which in 1970 was £222 million and which in the current year is £418 million, an increase of over £100 million in the same figure

terms over two years? Will he try to deploy some of that research and development capability in tackling the needs of fuel supply?

Mr. Gilmour: The right hon. and learned Gentleman was not quite fair in his earlier remarks. I said that we had not yet settled the final details of where the cuts will land. We know that £16 million will come from capital expenditure and the rest from procurement.
The right hon. and learned Gentleman knows that a lot of research and development goes on the MRCA and sophisticated weapon equipment. Obviously that is a matter to which we should pay attention. It is not something which we can scrap or cut savagely without serious consequences elsewhere.

Dame Irene Ward: Will my right hon. Friend bear in mind that I think it is much more important that defence expenditure should be maintained and that the additional saving which is now very necessary from the Government's point of view might be made elsewhere? Further, will my right hon. Friend bear in mind how excited I am to hear so many Labour Members suddenly coming down in favour of defence? It is most exciting, and we should give them every chance to have all the defence which is necessary.

Mr. Gilmour: I share my hon. Friend's excitement. Of course, no Department likes being cut. The Ministry of Defence likes the cuts no more than does my hon. Friend. However, in a time of great national emergency defence must make its contribution.

Mr. Peart: Is the right hon. Gentleman aware that the hon. Member for Tyne-mouth (Dame Irene Ward) has expressed a view which is held by certain Opposition Members and that it will be interesting to see whether the hon. Lady votes against her own Government on this matter.

Dame Irene Ward: No, that would not help.

Mr. Peart: All I say is that the Opposition believe in adequate defence consistent with the strength of our economy which has been weakened by the present Government. However, when the right hon. Gentleman makes his decision will


he undertake to produce a White Paper spelling out the details?

Mr. Gilmour: In view of the prelogemenon given by the right hon. Member for Workington (Mr. Peart), it will be very interesting to see his own attitude to his party's defence policy. There is a defence White Paper coming out very shortly. We do not propose to publish two.

Mr. Churchill: Faced with these cuts, which will affect his Department, will my right hon. Friend do everything in his power to ensure that the absolute minimum possible is cut from equipment which has been squeezed in successive defence reviews to the point where the defence posture of our Armed Forces in terms of numbers of aircraft and tanks is grossly inadequate?

Mr. Gilmour: Obviously we shall make the cuts in the least painful way we can, but I must tell my hon. Friend that the equipment programme cannot escape.

Recruiting

Mr. Goodhart: asked the Minister of State for Defence what action he is taking to improve the level of recruiting for the Armed Forces.

Mr. Blaker: I have nothing to add to what was said by my right hon. Friend on this subject in the defence debate on 12th December.—[Vol. 866, c. 431–4.]

Mr. Goodhart: Although temporary short-time working in industry should improve recruiting figures in the immediate future, may I ask my hon. Friend once again to have talks with his right hon. Friend the Secretary of State for Education and Science about the possibility of allowing senior schoolboys to joint the excellent training establishments run by the Armed Forces? Will he assure the House that the financial retrenchments in the defence budget will not lead to any change in our manpower requirements?

Mr. Blaker: On that last point, I can confirm it so far as can be foreseen at the moment. On the question of the recruitment of 15-year-olds, as has been said by my right hon. Friends in both Houses it is far too early to assess the permanent effect of the raising of the school leaving age upon recruitment, but

we shall be reviewing the situation when the normal pattern of school leaving is re-established.

Rear-Admiral Morgan-Giles: Does my hon. Friend understand that recruiting depends on giving the men the tools for the job? Will he get his right hon. Friend to issue a categorical denial of Press reports this morning that the through-deck cruiser is to be flogged off to Iran?

Mr. Blaker: It is not for me to comment on the through-deck cruiser.

Rear-Admiral Morgan-Giles: I asked my hon. Friend to get his right hon. Friend to do so.

Oral Answers to Questions — EMPLOYMENT

Glasgow Firemen

Mr. Bruce-Gardyne: asked the Secretary of State for Employment whether the outstanding terms of the settlement of the Glasgow firemen's dispute have yet been notified to the Pay Board; and when he expects that body to come to a conclusion on the compatibility or otherwise of that settlement with the current pay code.

The Minister of State, Department of Employment (Mr. R. Chichester-Clark): A settlement by the National Joint Council for Local Authorities' Fire Brigades for the whole of Great Britain was approved by the Pay Board on 14th December with the exception of one small item relating to unsocial hours premia which the board is discussing further with the NJC. In addition, I am informed that employers and firemen in Glasgow have reached agreement about payments to cover travel expenses but that the Pay Board has not so far been notified.

Mr. Bruce-Gardyne: I am grateful for that reply. Am I to understand from it that it is the view of the Pay Board that the settlement negotiated with the Glasgow firemen was in conformity with the pay code? If so, can my hon. Friend tell us what is the Government's estimate of the increase in earnings resulting from the settlement?

Mr. Chichester-Clark: As I explained in my first answer, there are a few points which remain to be settled. It is not for


me at this point to go into the details of what the amount will be.

Mr. Skinner: In view of the state of confusion about this pay award, will the hon. Gentleman take all the factors into account and remind his right hon. Friend that when he meets the miners on Thursday perhaps a settlement broadly along the lines of the Glasgow settlement might solve the miners' dispute?

Mr. Chichester-Clark: I have already said that the Glasgow settlement is a matter for the Pay Board. As for the rest of the hon. Gentleman's question, no doubt he will deploy his own individualistic views in the two-day debate which is to follow.

Mr. Markus Bodmer (Work Permit)

Mr. Frank Allaun: asked the Secretary of State for Employment why he has refused a work permit to the newly appointed International Secretary of the War Resisters International, Mr. Markus Bodmer, a Swiss national.

The Under-Secretary of State for Employment (Mr. Dudley Smith): Permits for overseas workers to take executive or clerical work are issued only where the job is specialised and the overseas worker has the right combination of qualifications and experience. The application made by War Resisters International in respect of Mr. Bodmer was refused because it did not satisfy those conditions.

Mr. Allaun: Is the hon. Gentleman prepared to meet a deputation on this matter before Christmas? Will he bear in mind that this organisation has had its international headquarters in London for nearly 50 years and that the man whom it appoints as international secretary is not always British?

Mr. Smith: The application was turned down because we felt that this man did not have the specialised experience. We know of the hon. Gentleman's concern. We in the Department of Employment always try to be helpful, and I shall be happy to see the hon. Gentleman to discuss the matter further.

Mr. Allaun: I thank the hon. Gentleman.

Oral Answers to Questions — GOVERNMENT MINISTERS

Ql. Mr. Molloy: asked the Prime Minister what further ministerial changes he is considering.

The Prime Minister (Mr. Edward Heath): I refer the hon. Gentleman to the reply which I gave to the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) on 13th December.—[Vol. 866, c. 180.]

Mr. Molloy: Is the Prime Minister aware that the present crisis has underlined the need for the establishment of a national energy co-ordinating department with a Cabinet supremo at its head responsible to this House of Commons in order to ensure that our country exploits to the full our indigenous resources? Will the right hon. Gentleman consider this as a proposition which should be implemented almost immediately?

The Prime Minister: The whole purpose of this Government since coming to power has been to exploit the country's indigenous resources to the utmost degree, and we shall go on doing that.

Mr. Laurance Reed: Is my right hon. Friend aware that there are many of his own supporters who share the conviction of the hon. Member for Ealing, North (Mr. Molloy)? My right hon. Friend has said that the North Sea operation should be conducted as though we were in wartime conditions, so let us have war-time conditions.

The Prime Minister: It was in a colloquial sense that I said it should be regarded as a war-time operation. I do not think that this House wants war-time conditions on the East Coast of Scotland. In fact, my right hon. Friend the Secretary of State for Scotland and my noble Friend the Minister of State have been treating this matter with the utmost urgency.

Mr. Grimond: Although I was grateful for the Prime Minister's non-answer to my Question on a previous occasion, may I ask whether he is aware that it is necessary that we should know who is the strategic authority on energy planning and that he should be a member of the Cabinet?

The Prime Minister: It is my right hon. Friend the Secretary of State for


Trade and Industry, who is a member of the Cabinet.

Mr. William Hamilton: And what a mess he is.

Rear-Admiral Morgan-Giles: Will my right hon. Friend accept the congratulations of his supporters that his crew has managed within the past 24 hours to take in a reef in the middle of a full gale, which is a very difficult job, and therefore it is hoped that he will not change any of its members?

The Prime Minister: I am grateful for my hon. and gallant Friend's nautical compliment.

Oral Answers to Questions — FUEL SUPPLIES (PRIME MINISTER'S SPEECH)

Mr. Ashton: asked the Prime Minister whether he will place in the Library a copy of his public speech at Croydon on 30th November concerning the fuel situation.

The Prime Minister: I did so on 4th December, Sir.

Mr. Ashton: Does the Prime Minister recall that in that speech he said that everything he did was always in the national interest? Can he say whether the coat of varnish that he applied yesterday to the woodworm and dry rot in the national economy was in the national interest or whether it was in the interest of the Conservative Party and a possible winter General Election?

The Prime Minister: The Government endeavour to put the national interest first. If the hon. Member does not wish to have a policy which has greatly helped employment and does not wish to see us taking the necessary steps to deal with the conditions forced upon us, he must say what else he wants to do.

Mr. Sutcliffe: In view of the energy situation, is my right hon. Friend now working out a new deal for the miners once phase 3 has been accepted by them?

The Prime Minister: I do not quite know what my hon. Friend has in mind by "a new deal". As I said to the

members of the NUM executive when they came to see me, they can negotiate anything within stage 3. I also pointed out to them that, as regards the longer-term interests of the industry, we had already shown our belief in the industry not by words but by committing £1,100 million of taxpayers' money to it for the future. If they wish to discuss with the National Coal Board the future manning and investment policy of the industry, the NCB will be perfectly prepared to do that, as will be the Government.

Mr. Benn: Will the Prime Minister explain how it is that on the one hand he is sticking to stage 3 when coal and electricity prices are to rise in excess of what is allowed in stage 3, while on the other hand miners' wages are to be held down, although both were covered by the Price and Pay Code?

The Prime Minister: The right hon. Gentleman must be more precise in his language. A wage offer by the National Coal Board which amounts to an increase of 13 per cent. in a year, plus 3½ per cent. in addition from an efficiency scheme, is not holding down wages in any sense whatever of the English language.
Yesterday my right hon. Friend the Chancellor of the Exchequer described the extent of the subsidies that are being paid to industries on prices—£150 million for coal, which may double, and £75 million for electricity—and he said that we would enter into discussions with the nationalised industries about any increases in prices to meet part of that subsidy.

Mr. Benn: In breach of stage 3?

The Prime Minister: There is no justification whatever for the right hon. Gentleman to say "In breach of stage 3".

Oral Answers to Questions — FUEL AND FINANCE (EEC TALKS)

Mr. Douglas: asked the Prime Minister if he will make a statement on the recent discussions he has had with EEC Heads of Government regarding energy and fiscal matters.

The Prime Minister: I will make a statement after Questions, Sir.

Oral Answers to Questions — RULE OF LAW (LORD CHANCELLOR'S SPEECH)

Mr. Whitehead: asked the Prime Minister if the public speech by the Lord Chancellor on 3rd December at the Junior Carlton Club about the maintenance of order represents Government policy.

Mr. Skinner: asked the Prime Minister whether the public speech by the Lord Chancellor in London on 3rd December concerning the rule of law represents the policy of Her Majesty's Government.

The Prime Minister:: Yes, Sir.

Mr. Whitehead: Is the Prime Minister aware that in that speech the noble Lord invited moderates and constituents in our constituencies to note the names of over one in four of hon. Members who were allegedly subverting the constitution? As the Government move towards the brink in their rhetoric of collision and confrontation, does the right hon. Gentleman agree that there are genuine dangers to democracy in a situation in which the constitution which those of us who are moderates would support no longer rests on the consent of the governed and when the sacrifices which have to be made are clearly not being delivered with the even-handedness which is needed in the measures that the Government have announced?

The Prime Minister: My noble Friend was dealing not with a particular group of measures but with the criticism of a judge of the High Court. The hon. Gentleman is right that the constitution depends on the support of Parliament which is elected by the consent of the people. My noble Friend was saying that, with a motion on the Order Paper, a judge cannot defend himself, but he is entitled to put the facts plainly before the public, and that was what he was doing.

Mr. Norman Lamont: Are not Labour Members rather late when they complain that they have not been urging people to break the law when only a few weeks ago the right hon. Member for Bristol, South-East (Mr. Benn) was pleading the cause of conscientious objection to man-made law? Is not this further borne out by the letter

written by the leader of the Greater London Council to the Leader of the Opposition about the Labour Party undermining our democratic law-making procedures? Whom does the Prime Minister think does more harm to the Labour Party—the right hon. Member for Bristol, South-East urging people to break the law, or the Leader of the Opposition creating a spurious unity and pretending that there are no such people in his party?

The Prime Minister: It is difficult to say, Sir.

Mr. Skinner: Does the Prime Minister recall that in that speech the Lord Chancellor stressed that the Industrial Relations Act should be observed to the letter? Consistent with that, will the Prime Minister tell us whether he recalls a famous Tory in 1947 saying that the essence of democracy was based not on bare majority rule but on the question of the liberty shown to minorities that did not conform? Does the Prime Minister recall that the author of that statement was Lord Hailsham of the Quintin Hogg variety? In this ever-changing mood and policies of the Government, on which of the two statements does the Prime Minister now put his money?

The Prime Minister: The law is there to uphold the interests of minorities, and a very large minority in the trade union movement have found it to be in their interests. In any case, I do not take the hon. Gentleman as the epitome of upholding the law.

Oral Answers to Questions — POPULATION

Sir Gilbert Longden: asked the Prime Minister if he will seek to implement the recommendations as to population growth of the First Report from the Select Committee on Science and Technology, Session 1970–71, which sought to place upon him direct responsibility for carrying out those recommendations.

Sir D. Renton: asked the Prime Minister whether he will now appoint a senior Minister to deal with population problems as recommended by the Population Panel in its First Report.

The Prime Minister: The Government accept the broad conclusions of the report


of the Population Panel, which was asked to consider population matters in the United Kingdom following the Select Committee's report in July 1971. We have already acted on the panel's only major recommendation for immediate action by providing for the development of comprehensive family planning services as part of the National Health Service in the National Health Service Reorganisation Act 1973 and the corresponding Scottish legislation. For the rest, the Government agree in principle that no further policy changes are required at present but that they should monitor further developments and inform the public of the results of their analysis.
I have asked my right hon. Friend the Lord President of the Council to undertake ministerial responsibility for coordinating this work. He will be assisted in this task by my hon. Friend the Parliamentary Secretary to the Civil Service Department.

Sir Gilbert Longden: I thank my right hon. Friend for that reply. Does he agree with much responsible and informed opinion that unless steps are taken, the world population will soon outgrow its resources of food and raw materials? Does he recall that the Population Panel, while not advocating any interference with marital habits, said that
Britain must face the fact that its population cannot go on increasing indefinitely"?

The Prime Minister: Yes, I recall that. As I have said, we have taken action on the main recommendation made to us by the panel. For the remainder, it is bound to be a question of public opinion and individual behaviour. As requested, we will make all information open to the public as it becomes available to us.

Mr. William Hamilton: Is the Prime Minister aware that, as the country gets colder, the cutting of television viewing hours makes no contribution whatever to the population problem?

Sir D. Renton: Is my right hon. Friend aware that the decision so far taken by the Government in this vitally important matter will be applauded by nearly all right hon. and hon. Members on both sides of the House? Is he further aware that, during the past seven years in which the policy has been evolved, this matter has had the support of all parties and that

we can all rejoice that that is so? Finally, may I express the hope that my right hon. Friend the Lord President of the Council, whose appointment we welcome, will be able to get down to work on this matter as soon as circumstances allow?

The Prime Minister: I thank my right hon. and learned Friend for what he has said. He has taken a close personal interest in the report, which I know has had support throughout the House. Of course, since we received the report a great deal of work has been done on it, and it will now be continued by my right hon. Friend the Lord President of the Council.

Mr. Biggs-Davison: On a point of order, Mr. Speaker——

Mr. Speaker: Order. I should be grateful if the hon. Gentleman would raise his point of order at the end of Question Time.

ECONOMIC SITUATION (CHANCELLOR'S SPEECH)

Mr. Horam: Q7. Mr. Horam asked the Prime Minister if the public speech by the Chancellor of the Exchequer in Altrincham on 1st December on economic affairs represented Government policy.

Mr. Norman Lamont: Q22. Mr. Norman Lamont asked the Prime Minister whether the public speech of the Chancellor of the Exchequer on the economy on 1st December in Altrincham represents Government policy.

The Prime Minister: Yes, Sir.

Mr. Horam: In that speech the Chancellor of the Exchequer blamed our economic problems on sectional interests. Yesterday, however, in reply to a question by my right hon. and learned Friend the Member for Aberavon (Mr. John Morris), he said that the measures that he then announced would have been necessary even if the industrial disputes were ended tomorrow. Does not that again show that it is not the miners who are to blame for troubles, but the three-year record of the Chancellor, who has produced a badly unbalanced economy and a social atmosphere in which conciliation, moderation and restraint are virtually impossible?

The Prime Minister: The hon. Gentleman has reached the wrong conclusion. I announced measures last Thursday which were required by the situation arising from industrial disputes. I shall be discussing those again later in the debate today. Obviously, if the industrial disputes come to an end, those measures can be changed.

Mr. Adley: Is my right hon. Friend aware that, far from openly and provocatively blaming too much the sectional interests to which reference has been made, many people feel that he has been over-modest in assigning blame to certain members of the executive of the National Union of Mineworkers?

The Prime Minister: My hon. Friend is quite correct. A great deal of time and energy has been spent, particularly in the last 18 months, in the very long and detailed discussions that we had—I believe, rightly. I shall say something later on that matter in the debate.

Mr. Benn: As the Government announced their measures last Thursday without any consultation with either the CBI or the TUC, will the right hon. Gentleman now make available to them and to the public the true position on distributed coal stocks so that we can assess whether these measures were really necessary or were part of psychological warfare against the miners by the Prime Minister?

The Prime Minister: I shall deal with that matter in the debate later today.

Mr. Speaker: Mr. Biggs-Davison, to raise a point of order.

Mr. Biggs-Davison: On a point of order, Mr. Speaker. As all the supplementary questions on the Question to my right hon. Friend the Prime Minister about population, from both sides of the House, were in one direction, I beg to give notice, without any criticism of the Prime Minister, that owing to the unsatisfactory nature of the reply I shall seek an early opportunity to raise the matter on the Adjournment.

(SUMMIT CONFERENCE) EUROPEAN COMMUNITY

The Prime Minister (Mr. Edward Heath): With your permission, Mr. Speaker, and that of the House, I should now like to make a statement.
The Heads of State or Government of the European Community met in Copenhagen on 14th and 15th December. The Middle East crisis and its serious consequences for the industrialised world were in the forefront and the meeting concentrated on these issues. A statement was issued after the meeting and will appear in the OFFICIAL REPORT.
On the Middle East the Nine reaffirmed their declaration of 6th November. They are ready to assist in the search for peace and in the guaranteeing of a settlement, on the basis of the full implementation of Security Council Resolution 242 in all its parts, taking into account the legitimate rights of the Palestinians. Four Arab Foreign Ministers visited Copenhagen at the time of the meeting and were received by the nine Foreign Ministers. The Danish Prime Minister drew their attention to the adverse effects of the oil cuts for both developed and developing countries.
We also agreed that the Community should take immediate action to review the facts of the energy crisis and to analyse the consequences for production, employment, prices, balance of payments and monetary reserves in all member States. The Commission will present proposals by 31st January 1974 to ensure the orderly functioning of the common market for energy. For the longer term, the Council will adopt a comprehensive Community programme on alternative sources of energy. The conference agreed on the importance of negotiating co-operative arrangements with oil-producing countries and of consultation with oil consumers.
At Copenhagen we were not trying to define in detail the action which will be taken by the Community. But Europe's leaders have laid down guidelines for a common energy policy, with the necessary deadlines. That is the traditional way in which the Community produces a common policy. British interests were


well protected in the decisions which were taken.
It was agreed that the regional fund should be established on 1st January without any link with the passage to the second stage of economic and monetary union. It is now for the Council to take the necessary practical decisions.
We also agreed on the need for the Nine to work out common positions quickly in times of crisis. Foreign Ministers will settle the detailed arrangements at their next meeting in February.
Finally, we agreed to meet more frequently, whenever the international situation so requires, and probably at least once in each six-month presidency.

Mr. Shore: I thank the Prime Minister for that statement. May I put to the right hon. Gentleman, first, that it would have been quite wrong for a meeting of so important a character not to have been the subject of a separate statement and questioning in the House, and all the more so because I understand, from the last sentence of the statement, that this is likely to be a pattern now and that we are likely to have six-monthly meetings of a summit character?
On the question of oil, which clearly dominated the whole of the Copenhagen summit, while we welcome short-term measures—our only regret is that there is no reference in the statement to Dr. Kissinger's important proposals—including oil sharing, to counter and resist oil blackmail, is the Prime Minister aware that the reference to a comprehensive Community programme of alternative sources of energy in the medium term and long term is an entirely different matter and that in the view of the Opposition, at any rate, it would be far better for Britain to develop North Sea oil and far better for France to finance Pierrelatte and other projects of that kind?
We note from the statement that the regional fund is to be established by 1st January. What is the Prime Minister's latest estimate of the size of the fund in 1974, and what is to be Britain's share in it?
Lastly, in the light of the quite appalling balance-of-payments problem that Britain now faces, did the Prime Minister take the opportunity of the summit to raise with the other European leaders

there the question of special measures that may have to be taken by the Government and the possibilities of derogations from the very harsh terms of the Treaty of Accession, which we otherwise shall have to bear?

The Prime Minister: It would be normal to make a statement after a meeting of Heads of Government, as indeed I do when meeting an individual Head of Government elsewhere. As I was answering Questions and speaking first in the debate today, it was suggested that I should deal with this matter in the debate. But as the right hon. Gentleman asked for a statement, I made it to the House. It is the normal thing to do in the ordinary way.
Regarding energy, right hon. and hon. Members of the Opposition must make up their minds. They say that they want co-ordinated energy arrangements at this particular moment but apparently in the longer term they do not want coordinated arrangements. They clearly cannot have it both ways. What we have done is to set down the arrangements for the Community to create the machinery to deal with both the short term and the long term. Regarding the particular items mentioned by the right hon. Gentleman, nothing that we have done precludes either of the developments of which he has spoken. A comprehensive energy policy in this situation means that the Community should develop all its resources of energy to the utmost extent where that is economically justifiable. That is what we shall now set about doing.
I cannot give the right hon. Gentleman an answer to his question about the regional development fund because that is under discussion today by the Foreign Ministers at the Council of Ministers in Brussels. We must await the outcome of that discussion.
I did not discuss alterations to the Treaty with any of my colleagues.

Mr. Hugh Fraser: I am sure that the House will be very grateful to the Prime Minister for his statement, which elucidates what happened at Copenhagen. It seemed to some of us that the OECD had failed to join the Arab League. I hope that the Prime Minister can——

Mr. Speaker: Order. We are now dealing with questions on the statement.

Mr. Fraser: May I, therefore, ask the Prime Minister, in view of his elucidations, what proposals he has with the OECD for supporting Dr. Kissinger's plan for a world front of the oil consumers to stand up against Arab blackmail?

The Prime Minister: First, it would have been quite wrong if the meeting of Heads of Government and Foreign Ministers in Copenhagen had not been prepared to meet the six Arab Foreign Ministers who went to Copenhagen. It was a courtesy to meet them and to hear their point of view. I welcomed Dr. Kissinger's proposal in the House last Thursday, and the Heads of Government decided that the best means of co-operation in all ways is through OECD, at which the North Atlantic countries are present, as well as Japan. It is in the OECD that Dr. Kissinger's proposal can best be discussed and decided upon. Dr. Kissinger's proposal was not put in terms of standing up to blackmail; it was put in terms of allowing Western industrialised countries to develop their resources of power and to find ways whereby the resources which are now becoming available to Arab countries could be used for investment in the Western world.

Mr. David Steel: May I press the Prime Minister on the important question of the regional fund? It appeared to outsiders that there was a dragging of feet on this question at Copenhagen. Will the right hon. Gentleman enlarge on that a little?

The Prime Minister: There was no dragging of feet by myself, by my right hon. Friend or by the British Government. We believe that a proper regional fund is an essential element of full Community life, just as much as any other aspect, such as economic and monetary development or an energy policy.

Mr. Tebbit: On the matter of energy supplies, did my right hon. Friend carry to his colleagues at that meeting the message that this country and both sides of the House are resolute in refusing to submit to blackmail? [HON. MEMBERS: "Hear, hear."] Under that condition—and with that applause from the Opposition—may I ask my right hon. Friend whether he inquired whether anyone over there had any coal to spare?

The Prime Minister: It was agreed that energy policy, in its development and allocation, would have to be equitable and take into account the needs of particular countries at particular times. The needs of this country at the moment were fully recognised by my colleagues.

Mr. Clinton Davis: Would the right hon. Gentleman say what initiative his Government proposed with regard to an alternative resolution on the Middle East, and would he define how his Government regard the legitimate aspirations of the Palestinians?

The Prime Minister: We have put forward no different initiative on the Middle East, because we believe that Resolution No. 242 should be implemented in all its parts. The members of the United Nations, including successive British Governments, have recognised that the interests of the Palestinians, in particular the refugees, have to be taken fully into account, and this must be done at the peace conference.

Mr. Awdry: Did the other Heads of Government express any views about the present British trade union position?

The Prime Minister: No, Sir. We do not discuss each other's internal arrangements.

Mr. Elystan Morgan: Mr. Elystan Morgan rose——

Mr. Douglas: On a point of order. I do not want to question your judgment of the choice of Members to put questions, Mr. Speaker, but I understood that the Prime Minister was making this statement after refusing at the proper time to answer Question No. Q3 from me.

Mr. Speaker: I am obliged to the hon. Gentleman for reminding me of that fact.

Mr. Elystan Morgan: Will the Prime Minister confirm that he will demand of the Council of Ministers that the regional fund should be not less than £1,000 million per annum, and that he will not tolerate any possibility of it being reduced to the level of £200 million or £300 million, as has been widely reported in the Press in the past few days? Does he appreciate that a level as low as that would be a mere drop in the ocean of the need of the peripheral areas, which have already been gravely weakened by


the restrictive provisions of the Common Market?

The Prime Minister: I cannot accept the last point. The peripheral areas have not in any way been weakened by membership of the European Community. In fact, at present, as the hon. Gentleman agreed with me a little earlier, the regional arrangements are better than they have ever been before and the regions have a higher level of employment than for a very long time. But I have already said that we regard the regional development fund as a major item of Community life, and the amounts have to be negotiated in the Council of Ministers.

Mr. Dixon: Was there any sympathetic discussion of the problems of the Japanese economy?

The Prime Minister: There was no specific discussion about the Japanese economy as such, but in our discussions of energy and oil problems it was recognised that these matters have to be dealt with in the context of the West as a whole, which means the United States, Canada, Japan and the European Community. The obvious forum in which to do that is the one body to which we all belong at the moment—OECD.

Mr. Douglas: Would the Prime Minister concede that the energy problem and the international monetary problem are inextricably linked? What discussion, therefore, did the Heads of State have about ensuring that the developing nations could pay for the energy that they require, particularly from the Arab nations? Second, in relation to the balance sheets of which the energy communiqué speaks, how does he propose to put our resources of indigenous fuels and our labour resources into that balance sheet? What long-term views does he take of our indigenous fuel supply position and the employment position, particularly of the mining industry?

The Prime Minister: I agree with the hon. Gentleman that the whole of the oil situation and the world international monetary position are now inextricably bound up because of the very large balances that the oil-producing countries will accumulate immediately and, in particular, during 1974 and thereafter. As for the developing countries, we have made

our position clear to the Arab countries—that they are not only damaging the Western industrialised world by bringing our standard of living to a standstill, or even depressing it, but they are also affecting the developing countries, particularly India, for example. We have put a proposal to them to take that into account in their present arrangements.
What we did as Heads of Government was to ask the Community immediately to set up machinery which will be able to discuss this with the oil-producing countries as well as with the developing countries. The balance sheet is one of information. First and foremost, the Community countries will be dealing with information at this present time on shortages of energy of various types; they will then move on to the longer-term objectives as to what will be possible in the Community.

Several Hon. Members: Several Hon. Members rose——

Mr. Speaker: Order. Mr. Robert Carr, statement.

Mr. Faulds: On a point of order. Since, quite accidentally, Mr. Speaker, your eye lit on a strange assortment of Zionist apologists and protagonists, and since, on this issue, Britain's interests are paramount, would it not have been fairer, since our oil problems are caused not by Arab intransigence over Arab oil but by Israeli intransigence over occupied Arab territories?

Mr. Speaker: Order. That is not a point of order.
Following is the text of the Declaration released to the Press after the European Community Summit in Copenhagen:
The Heads of State or Government of the member States of the European Community met in Copenhagen on 14th and 15th December 1973 at the invitation of the Prime Minister of Denmark. The President of the Commission participated actively in their work on Community questions. They agreed as follows:

1. The Nine countries affirm their common will that Europe should speak with one voice in important world affairs. They adopted the Declaration on the European identity, which defines, with the dynamic nature of the Community in mind, the principles which are to underlie their action.
2. They decided to speed up the work required to define the European Union which they had set themselves as their major objective at the Paris Summit. They asked the


Presidency to make the necessary proposals without delay.
3. They decided to meet more frequently. These meetings will be held whenever justified by the circumstances and when it appears necessary to provide a stimulus or to lay down further guidelines for the construction of a united Europe.

It will be for the country providing the President to convene these meetings and to make detailed proposals concerning their preparation and organisation.
The Heads of State or Government attach the greatest importance to the institutions of the Community playing their full role and to the necessary decisions being taken there in good time.

4. They also agreed to meet whenever the international situation so required. It was agreed that the Foreign Ministers of the member States should, at their next meeting, decide on the means by which a common position should be worked out quickly in times of crisis. The development of political cooperation will also enable them to make joint assessments of crisis situations, with the aim of foreseeing them and of taking the measures needed to deal with them.
5. They confirmed their support for the policy of international détente which respects the independence and security of each State and the rules laid down in the Charter of the United Nations for the prevention and settlement of conflicts.

They agreed that the growing unity of the Nine would strengthen the West as a whole and will be beneficial for the relationship between Europe and the United States.

6. The Heads of State or Government welcome the convening of a peace conference in Geneva and call on the participants to make every effort to achieve a just and lasting settlement at an early date. The Nine Governments are ready to assist in the search for peace and in the guaranteeing of a settlement.

The Heads of State or Government reaffirmed the united stand of their Governments on the Middle East question embodied in the Declaration issued on 6th November. Recent events have strengthened them in their view that the security of all States in the area, whether it be Israel or her Arab neighbours, can only be based on the full implementation of Security Council Resolution 242 in all its parts taking into account also the legitimate rights of the Palestinians.
The Heads of State or Governments are convinced that the requirements of sovereignty and the requirements of security can be met by the conclusion of peace agreements including among other arrangements international guarantees and the establishment of demilitarised zones.
They will inform the Secretary-General of the UN thereof.

7. As regards the European Communities, the Heads of State or Government reaffirmed the importance they attach to what the community has already achieved and their will to see it develop. After examining the progress

already made in implementing earlier decisions they agreed:

To invite the Community institutions to take measures to achieve more rapid progress towards the full establishment of economic and monetary union building on the decisions already taken.
To seek actively the definition of a common position on reform of the international monetary system, to increase the instruments at the disposal of the European Monetary Co-operation Fund and to strengthen the co-ordination of their action to deal with de-stabilising capital movements, in order to create an area of stability in Europe.
The Heads of State and Government agreed that the Regional Development Fund should be established on 1st January 1974. As an expression of their positive attitude to the establishment of the Fund they agreed to recommend to their Foreign Ministers that the Council of the European Communities at its next session shall take the necessary decisions concerning the size and the distribution of the Fund and the criteria for the Fund's operations.
To implement a social action programme having as its aims the achievement of full and better employment in the Community, the improvement of living and working conditions in a way which makes possible their harmonisation while the improvement is being maintained, and growing participation by the social partners in the Community's economic and social decisions and by workers in the activities of enterprises.
To make the functioning of the Community's institutions more effective by improving co-operation between the Council, the Commission and the Parliament, by a more rapid procedure for the settlement of questions submitted to the Community authorities and by reinforcing its financial control, involving inter alia the establishment of an independent Community audit board and the strengthening of the role of the European Parliament in budgetary matters.
That the Foreign Ministers at the next session of the Council of the European Communities find a solution to enable the Faroe Islands to postpone their decision concerning membership of the European Communities until the result of the Conference on the Law of the Sea is known.
The Heads of State or Government, mindful of the importance that this attaches to problems arising from international trade in primary products and raw materials, asked the Commission to prepare a detailed study and to put proposals to the Council.
The Heads of State or Government called on the Community to develop more actively a common policy on industrial, scientific and technological co-operation in all fields.

8. The Heads of State or Government have considered the question of energy in a separate paper, attached to this Declaration.
9. The Heads of State or Government are convinced that a united Europe will be able to play a role consonate with its history and


its abilities in the service of economic and social progress in the Community, of the growth and industrialisation of developing countries and of peace between all nations.
ANNEX TO THE COMMUNICATION OF THE PRESIDENCY
Energy
The Heads of State or Government considered that the situation produced by the energy crisis is a threat to the world economy as a whole, affecting not only developed but also developing countries. A prolonged scarcity of energy resources would have grave effects on production, employment and balances of payment within the Community.
The Heads of State or Government therefore agreed on the necessity for the Community of taking immediate and effective action along the following lines.
The Council should adopt at its session of 17th–18th December 1973, the Community Instruments which will enable the Commission to establish by 15th January 1974, comprehensive energy balance sheets coverng all relevant aspects of the energy situation in the Community.
The Commission should on this basis proceed to examine all present or forseeable repercussions of the energy supply situation on production, employment, prices and balances of payments, as well as on the development of monetary reserves.
The Heads of State or Government ask the Commission to present by 31st January 1974, proposals on which the Council will be invited to decide as quickly as possible and in principle before 28th February 1974, to ensure the orderly functioning of the common market for energy.
In this context the Commission is asked to submit to the Council as quickly as possible for rapid decision proposals aimed at resolving in a concerted manner the problems raised by the developing energy crisis.
For the same reasons they asked the Council to adopt provisions to ensure that all member States introduce on a concerted and equitable basis measures to limit energy consumption.
With a view to securing the energy supplies of the Community the Council will adopt a comprehensive Community programme on alternative sources of energy. This programme will be designed to promote a diversification of supplies by developing existing resources, accelerating research in new sources of energy and creating new capacities of production notably a European capacity for enrichment of uranium, seeking the concerted harmonious development of existing projects.
The Heads of State or Government confirmed the importance of entering into negotiations with oil-producing countries on comprehensive arrangements comprising cooperation on a wide scale for the economic and industrial development of these countries, industrial investments, and stable energy supplies to the member countries at reasonable prices.

They furthermore considered it useful to study with other oil-consuming countries within the framework of the OECD ways of dealing with the common short and long-term energy problems of consumer countries.
The Council should establish at its session of 17th–18th December 1973, an energy committee of senior officials which is responsible for implementing the energy policy measures adopted by the Council.

BOMB INCIDENTS (LONDON)

The Secretary of State for the Home Department (Mr. Robert Carr): With permission, Mr. Speaker, I wish to make a statement.
At about 8.50 this morning a bomb exploded in Thorney Street, which leads off Horseferry Road. The bomb was planted in a car which is known to have been stolen in London last night, and was parked outside Horseferry House, a building occupied by my Department, and opposite Thames House, which is mainly occupied by the Department of Trade and Industry. Both these buildings, and others nearby, were extensively damaged.
I regret to say that a considerable number of people were injured, and about 40 received treatment in Westminster Hospital. Two of these were seriously injured and required operative treatment, although I am glad to say that I understand that their condition is now satisfactory. When I visited the hospital at midday a further seven were still detained for treatment for cuts, shock and other minor injuries.
I am sure that the whole House would wish to express our sympathy to those who have been injured. I would also like to pay tribute to the hospital staff, who treated the injured with such speed and sympathy, and to the police, who coped so well and speedily with the whole situation.
Two warnings were given of this morning's bomb. The first was by means of an anonymous telephone call to the offices of the Evening News at 8.22 a.m. The caller said that there was a bomb in Horseferry Road and Marshall Street and that these streets should be cleared immediately. It is presumed that the caller must have meant Marsham Street and not Marshall Street. The police were informed and started their search in these


streets. While the search was in progress there, the bomb exploded in Thorney Street.
The second warning, also anonymous, was received by the telephone operator in Horseferry House at 8.45 a.m., saying that there was a car bomb outside, timed to explode in half an hour. Precautionary action was being taken when the bomb exploded only about five minutes later.
I should also report to the House that two postal bombs were delivered in London yesterday. The first was received by British Home Stores in Marylebone Road. A member of the staff was suspicious, and called the police, who dealt with the bomb successfully. The second was received by the Chief of Staff, London District, at his home. It exploded and injured his hand. He is still in hospital, where his condition is described as comfortable.
The Metropolitan Police issued public warnings last night about the need for care in dealing with suspect mail. And I should like to reinforce these warnings very strongly.
The police are doing their utmost to apprehend those responsible for these outrages.

Mr. Roy Jenkins: The House will have heard with deep regret of the incident this morning and of the other incidents, and I join the Home Secretary in expressing our sympathy to the victims and hoping for the speedy recovery of the injured. I also join in expressing our gratitude to the hospital authorities and the police for the expeditious way in which they have dealt with these problems, and in expressing the hope that those responsible for these outrages will be speedily apprehended.

Mr. Tugendhat: It is conventional on these occasions that the Member of Parliament for the constituency in which outrages of this sort occur should also ask to be joined in sympathy with speakers from the two Front Benches. Although it is a convention, its importance is in no sense diminished, nor is the strength of one's feelings diminished when incidents such as this occur.
My constituency, for obvious reasons, has been singled out during the course of this year for bomb outrages of every

sort in streets and in stations.—[AN HON. MEMBER: "What about Northern Ireland?"] My constituency is not in Northern Ireland, it is not a party to the disputes that have been taking place there, and my constituents are innocent of what has been happening there.
We join the two Front Benches in expressing our sympathy to those who have been injured, and in expressing our admiration of the police and the emergency services and on this occasion, too, of Westminster Hospital. We are confident that the police will apprehend the wrongdoers in the way that they did at the time of the Old Bailey bomb. I am sure that the Home Secretary can give my constituents the assurance that no energy will be spared on that account.

Mr. Carr: I certainly give that assurance to my hon. Friend.

Mr. Beith: Like many hon. Gentlemen, I heard the explosion and feared the worst and, as it happens, more people have been injured. My hon. Friends and I share in the expression of sympathy. But I wonder whether the right hon. Gentleman can indicate to what extent the police were successful in clearing Horseferry Road after the warning. I also wonder whether there are any features of the postal bombs which will be helpful to people all over the country in watching for bombs. Are there any new distinguishing characteristics which people could watch for? If the right hon. Gentleman can help us on those points, it will be appreciated.

Mr. Carr: I am satisfied that the police coped remarkably well in seeking to discover the bomb beforehand and in controlling traffic, as well as in dealing with the injured and so on afterwards. They were frustrated in the search for the bomb by the fact that what appeared to be precise information turned out to be very vague information about the general area, and of course they started their search from a point which they hoped would be precise.
I think it would be rather foolish of me to try to give the House and the public any description of the postal bombs because they can vary from one packet to another. I understand that the latter two were more of the nature of a book and less of the nature of a small package


than the earlier bombs, but that does not mean that people should be suspicious only of books. They must be suspicious of all sorts of packages which arrive in their homes or offices and about the identity of which they are not certain.

Mr. Gardner: Can my right hon. Friend confirm that, after the previous IRA attacks by cars loaded with explosives, speedy restrictions were imposed on the parking of cars near Government buildings, and can he say whether any of those restrictions were later lifted? If they were lifted, can he assure the House and the country that they will be reapplied and maintained until dangers of this kind have passed?

Mr. Carr: The full severity of the parking restrictions imposed last March has since been reduced, although more than usual care has been taken compared with previous practice, but I will, of course, consider whether parking arrangements ought to be even further restricted in obvious target areas. Of course, such consideration is offset by the pressure at the moment from a greater number of people needing to park their cars in the centre of London. But this is a matter to which I will give urgent consideration and I assure my hon. and learned Friend that we shall take all reasonable steps.

Mr. Arthur Lewis: While appreciating what the police did and paying tribute to them on this occasion, may I ask the Home Secretary whether, if I give him details of several occasions when there has been a possibility of such incidents and the police have refused to take action, he will ask the police to do what the public expect them to do in such cases? I can assure the right hon. Gentleman that I have details of several cases, and if he will have a word with me afterwards I will supply them.

Mr. Carr: If the hon. Gentleman has such details he should submit them to me. Indeed, I would say that he should already have submitted them to me.

Mr. Mather: Will my right hon. Friend consider whether the restrictions should apply to unattended parked cars near Government buildings? Will he also reconsider the proposal, put to him last summer, that the IRA should be

declared an illegal organisation in Great Britain, as it is in the countries of the two other members of the Council of Ireland? Will my right hon. Friend also institute travel documents between Britain and Ireland?

Mr. Carr: Of course I will give close consideration to the whole question of parked cars and to what it is best and, indeed, practicable to do. On the question of proscribing the IRA and related matters, as I have made clear several times the Government have given these the most careful consideration. I should like to repeat that we shall not hesitate to take any steps which will, in our opinion, assist both in preventing such outrages and in catching the perpetrators of them if, alas, they have occurred. I have confirmed in consultation with the Commissioner of the Metropolitan Police this morning that, in his opinion and that of his senior officers, such additional powers would not be helpful to them in present circumstances. But I repeat that this is a matter which I keep under constant review, and there is nothing final or definite about it.

Several hon. Members: Several hon. Members rose——

Mr. Speaker: Order. I am afraid that we must move on to the next business.

COMPLAINT OF PRIVILEGE

Mr. Speaker: I have considered the complaint made to me yesterday by the hon. Member for Bolsover (Mr. Skinner) in relation to privilege. The issues raised by the complaint are not such as would, in my opinion, justify me in giving the matter priority over the orders of the day.

Mr. Skinner: On a point of order. It is somewhat significant, Mr. Speaker, that you have reached that decision, since the main reason given for the meeting to which I referred was a policy decision taken by the Opposition. It is also significant because, whereas it has always been a breach of privilege to talk——

Mr. Speaker: Order. I do not quite understand what the hon. Member is doing. Is he seeking to query my ruling?

Mr. Skinner: That is what I am doing.

Mr. Speaker: In that case I must point out that he may not do it. He must do it in another way. Nothing that I have said prevents him putting down his own motion with regard to this matter. He can do that.

Mr. Skinner: I have not finished, Mr. Speaker. What I have to say is that I am using the right that is given to me and to other Members of Parliament, including some who exercise their rights under parliamentary procedures very often in this House. What I want to say about your ruling is that I am somewhat excited at the prospect that, according to you, it is not now a breach of privilege to say that Members of Parliament are cadging money from big business.

Mr. Speaker: I think I will pass no comment on what the hon. Member said.

BILL PRESENTED

COMPANIES BILL

Mr. Secretary Walker, supported by Mr. Chancellor of the Exchequer, Mr. Secretary Whitelaw, Mr. Secretary Carr, Mr. Secretary Campbell, Mr. Secretary Peter Thomas, Sir Geoffrey Howe and Mr. Anthony Grant, presented a Bill to amend the law relating to companies and to dealing in securities; and, in connection therewith, to amend the law of bankruptcy and the law relating to the registration of business names: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 52.]

ANTI-HARASSMENT BILL

4.0 p.m.

Mr. A. W. Stallard: I beg to move,
That leave be given to bring in a Bill to amend the law against harassment of occupiers.
The Bill is designed to combat the activities of "winkling" and harassment. I am grateful for the obvious interest being shown in this matter by the whole House.
On 23rd May last I introduced a similar Bill, and hon. Members will recall the arguments and examples I deployed then. The Bill was objected to then and on every subsequent Friday until the end of

the Session by the Government Chief Whip and it failed to get a Second Reading. It failed in spite of the exposures in the News of the World, The Times, the Sunday Times and many other newspapers and magazines about the continuance and extension of the activities of "winklers".
Let me remind the House of some of those activities. In the News of the World of 30th September a landlord was reported as saying—

Mr. Russell Kerr: On a point of order, Mr. Speaker. Some of us are fascinated by this speech. May we, therefore, have a little shush?

Mr. Stallard: I am grateful for my hon. Friend's interruption. The News of the World article reported a landlord as saying:
the problem is getting out the sitting tenants. Some go easily, others need a little help. One of the methods we have been trying lately is bribery. I start at £100 and work up to £500, sometimes even £1,000. I never go above that figure—it's not economical. From then on I use force. I prefer force. In the long run it's much cheaper.
He goes on speaking about tenants:
If they are old then my lads might burst a water pipe in the middle of the night. Sometimes we take giant rats and hide them in a bed. A rat was once put in a cot. I didn't approve of that, but by God, did it do the trick.
The trick, of course, is to obtain vacant possession of the premises. I know, too, from my correspondence of the concern which is growing throughout the country at the increasing number of illegal convictions by landlords and landlords' agents. I could add many examples if time permitted; but in the Second Reading debate which will inevitably follow either this Bill or a similar measure I shall give detailed examples. I know, too, that the practice of "winkling" is becoming so widespread that many hon. Members will have examples from their constituencies.
Some hon. Members may have seen the discussion document published this week by seven independent advice centres in the city of Birmingham. They say that harassment and illegal evictions are more common than is normally supposed by the local authority or the courts in that city. Pressure should be brought on Parliament, they say, to make the law


on harassment more effective and to introduce stiffer penalties.
My Bill seeks to do three things. First, it will remove the need to prove "persistency" and will shift some of the burden of proof from the prosecution, thus enabling local authorities to take more cases to court. Hon. Members, particularly those representing areas of housing stress, will be familiar with the considerable problems which arise when gas, water or electricity services are cut off by the landlord. In order for harassment to be proved the cutting off has to be persistent, and unscrupulous landlords know this and act accordingly. The question of intent to force the occupier to leave has to be proven by the occupier, and this is extremely difficult as the law now stands. I shall seek to amend the law accordingly.
Secondly, my Bill will introduce minimum penalties in place of the present maxima. In a recent debate I gave examples of the derisory penalties which were being imposed in spite of the increases provided for in the Criminal Justice Act. Since then I have obtained further figures and if time permitted I would have given a detailed analysis of the statistics. However, suffice it to say that out of 117 successful prosecutions in the London area during the period I examined, only 18 resulted in fines of over £50; 85 resulted in fines of less than £50; and 14 resulted in an absolute discharge.
When the difficulties of getting cases into court are appreciated and when it is realised how many sound cases of blatant harassment cannot even be taken to court because of the difficulties, it may be realised that the level of penalties is a far from satisfactory deterrent, and some London boroughs are on record in support of that view.
Thirdly, my Bill will give the police powers of arrest in cases of unlawful eviction or where services are deliberately cut off. "Winklers" do not work a five-day week, nor have they a ban on overtime. Tenants often have to turn to the overworked, understaffed police for help. At the moment the police are loth to

interfere in even the most blatant cases of harassment. The police should receive more thorough training in some aspects of landlord-tenant legislation and should be given powers of arrest in certain circumstances. My Bill will give the police those powers.
I believe that the complacency and complete lack of understanding shown by the Secretary of State to this problem is typical of the Government's attitude which was so vividly illustrated by the Chancellor's utter failure to deal with property speculators in yesterday's Budget. Had the Chancellor taken realistic steps to curb the ruthless exploitation of the weakest members of our society by those who make fortunes out of misery and distress, my Bill would have been irrelevant. There is something sick about a society which allows those in such desperate housing need to be so viciously exploited in the sacred name of profit. The huge profits being made by the voracious sharks is a well-established fact. The total social cost of these activities has yet to be assessed. I ask the House to support the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. A. W. Stallard, Mr. Thomas Cox, Mr. George Cunningham, Mr. Neil Kinnock, Mr. David Weitzman, Mr. Julius Silverman, Mr. James Johnson, Mr. Gavin Strang, Mr. Roland Moyle, Mr. James Wellbeloved, Mr. William Price, and Mr. Robert Hughes.

ANTI-HARASSMENT BILL

Bill to amend the law against harassment of occupiers presented accordingly and read the First time; to be read a Second time upon Monday 21st January and to be printed. [Bill 54.]

ECONOMIC AND ENERGY SITUATION

[FIRST DAY]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]

Mr. Speaker: I have to inform the House that more than 80 hon. and right hon. Members want to speak in the debate, apart from the Front Benchers. Obviously there will be many disappointments, but the shorter the speeches the fewer the disappointments.

4.9 p.m.

The Prime Minister (Mr. Edward Heath): The House will be addressing itself during this two-day debate to the difficult and, indeed, grave situation facing the British nation. It is in view of this situation that I have been in communication over the past two days with Premier Chou En-Lai and asked, with the deepest regret, to be allowed to postpone my visit to China which was to take place in January, and he has agreed to this. I say "with the deepest regret" because I believe it would have been in the interest of our two countries as well as in the national interest.
The measures which were announced by me to the House last Thursday and by my right hon. Friend the Chancellor yesterday must be judged both on the extent to which they cope with our problems and on the way they avoid damaging our national interest.
One first point I can make quite briefly. Nothing that is happening now, in the immediate present, in the short-term future, or in the longer term in any way decreases the imperative need for this country to expand its industrial capacity, and thus to be able to sustain economic growth. Indeed, the future outlook for the supply of energy and raw materials makes this more, not less, necessary. There have always been those who are opposed to a policy of growth because they do not mind the waste which comes from unemployment, and those who want the benefit of expansion without being prepared to accept the obligations of making it possible.
The right hon. Gentleman the Leader of the Opposition and his colleagues have

never been prepared to recognise the burden bound to be placed on the balance of payments by the demands made by the re-equipping of British industry, and by its needs for fuel and raw materials in a time of expansion. But we cannot escape these demands on the balance of payments. We must be able to meet them if we wish to see expansion, a reasonably low level of unemployment, and an improving standard of living.
If the measures announced yesterday by my right hon. Friend the Chancellor of the Exchequer were to mean the end of the attempt to solve this problem, which has dogged the country for the past 25 years, it would indeed be a sad and bleak day for Britain. But that is not so. Private industrial development is not affected. The energy industries are exempt from the reductions in public expenditure. The overseas markets are there, and our exporters have the edge in price over our competitors. So British industry needs to carry on with investment plans for expansion, and the Chancellor's measures will allow it to do so.
I now turn to those aspects of our problems which need more detailed treatment today. The supply of oil reaching our shores has been reduced, by up to 15 per cent. this month. But this in itself would not call for a drastic reduction in the consumption of electricity and a three-day working week in most of our industry. It would not have called for that.

Mr. Gerald Kaufman: Mr. Gerald Kaufman (Manchester, Ardwick) rose——

The Prime Minister: These measures have been made necessary by the reduction in deliveries of coal to power stations which arise from the overtime bans in the coal industry and among the train drivers. We do not know how long the situation will continue. In this situation the Government were bound to take the measures necessary to safeguard essential services and maintain a reasonable level of industrial production. I shall have more to say about those measures a little later.
For the moment I can only add that it will not be possible to reverse the measures we have taken and restore warmth to our homes and full-time working for


the whole of industry until normal working has been resumed in the coal mines and on the railways.
The tragedy is that the effect of these measures is to reduce output, delay exports and postpone investment just when we need above all to do exactly the opposite. The effect of the increase in oil prices makes it necessary for us still further to increase our exports in order to earn the extra foreign exchange we need to pay for our oil. To increase our exports we must expand our output and maintain a high level of investment. So I emphasise again that the measures announced yesterday by the Chancellor are not designed or intended to create deflation or recession. They are intended to limit the demands that the Government and the domestic consumer place upon the economy, so that there is room for the higher exports and the greater investment which we need.
There are those who would not have wished us to take the measures to restrict domestic demand which the Chancellor has taken. They are afraid that the greater danger at present is that of recession in the industrialised countries. I recognise the reality of those fears. It will need international co-operation of a high order to avoid a retreat into protectionism and beggar-my-neighbour policies.
But some of the comments on the economic measures announced by my right hon. Friend yesterday have suggested that the measures do not go far enough, either in the amount of demand they take out of the economy or in the distribution of their impact. I do not think that that first impression will survive a more careful examination. Public spending on investment and procurement is to be reduced by £1,200 million next year. To take the equivalent amount of demand out of the economy by taxation would require an increase of more than 7p in income tax right up the scale or, if one were thinking in terms of indirect taxation, it would mean a doubling of the rate of value added tax.
In addition, there are hire-purchase controls and consumer credit limitations. My right hon. Friend has surely been right, at a time when earnings levels are endangered by fuel shortages, not to resort to fiscal measures which would

reduce take-home pay or put up prices further.
As to the social impact, my right hon. Friend has announced measures which will substantially reduce the gains to be made from property speculation. He has also imposed a 10 per cent. surtax surcharge—[An HON. MEMBER: "They are laughing at it."]—a measure which will have an effect on demand roughly equivalent to a 5 per cent. increase in all income tax rates above 40p in the pound. So the impact of the fiscal measures contained m my right hon. Friend's statement is heavily concentrated on property, on those who are rich and those who, because they are paid on a monthly salary basis, are less likely to suffer loss of earnings as a result of short-term working in industry.

Several Hon. Members: Several Hon. Members rose——

The Prime Minister: The foundation for international co-operation for this was laid at Copenhagen. As I have told the House, at their meeting the Heads of Government of the Nine were all concerned at the effect of a prolonged scarcity of energy resources on production and employment. The decisions taken at Copenhagen cover the whole field of energy questions, from the immediate problems of supply to long-term energy policy.
We decided to join with other oil-consuming countries and the OECD in seeking solutions for all these problems. We are looking for ways which will enable us to follow Dr. Kissinger's line of approach, while recognising the need for this to cover the anxieties of the OECD countries as a whole, including, of course, the members of the European Community.
There is no difference between the two sides of the House about the seriousness of the energy problem. There is substantial agreement, too, about the longer-term measures which we need to take at home.
First, there is the maintenance and expansion of the coal industry—though it is difficult to persuade the public of the advantages of investing vast sums in the industry when its products are not available in the hour of the country's need. Secondly, there is the fastest possible exploitation of oil on the Continental Shelf. Thirdly, there is the development of nuclear power.

Mr. Anthony Wedgwood Benn: By buying American reactors.

The Prime Minister: The right hon. Gentleman has, again, no justification for implying an accusation of that kind, for the third time today. Let him get a little precision in his remarks.
But we must concern ourselves not just with energy supplies but with the whole range of raw material supplies and natural resources.
There is, I believe, a wide measure of agreement that the twin problems of oil supply and the world prices of other raw materials and essential commodities are two major external factors over which we in this country have no direct control, as the Leader of the Opposition recognised in his broadcast.
The recent massive increases in world food and raw material prices represent an enormous shift in the basic economic conditions in which we as a country must operate. As a nation, we must recognise this change and understand its consequences. Above all, we must so order our society that we can best face the difficulties and the challenges which this enormous shift poses.
But we must also recognise that this development is bound to have most far-reaching effects on the relationship between the developed and the developing world in economic, trading and monetary affairs. In this, the genuine desires of some for better conditions are bolstered by the political determination of others, as we learnt in Copenhagen, to secure redress through the price level for what they believe to be consequences of years of colonial rule.
I want now to deal with our immediate problems here at home and the measures I announced last Thursday. I hope that no one in the House will underestimate the gravity of the short-term situation. The immediate consequences are higher unemployment, a reduced level of industrial activity and wide losses of production. The longer the restrictions are prolonged—and no one wants to keep them a day longer than necessary—the greater the damage to our hopes for the future.

Mrs. Renée Short: Just pay the miners.

The Prime Minister: Twice there has been that cry from the Opposition benches. I shall deal with the consequences of carrying out that suggestion a little later in my speech.
In the Government's view, the measures we have taken are the minimum necessary to secure the electricity industry from major disruption, to protect essential services from dislocation, and to ensure the continuation of industrial activity at the highest level consistent with the supply situation.
I should like to give the House the facts about the present situation, as I told the right hon. Gentleman opposite I would. The measures we took on 19th November have ensured that oil stocks have remained at reasonably satisfactory levels. But industrial action by the electricity power engineers, the coal miners and the train drivers has combined to compound the difficulties facing us.
It is coal and not oil upon which we depend for our electricity. Coal accounts for 70 per cent. of electricity generation and oil for only about 20 per cent. Deliveries of coal to power stations over the past four weeks have averaged less than two-thirds of what they were expecting, and they have been burning much more coal than they have been receiving. The Central Electricity Generating Boards' stocks of coal stood at 18 million tons in October. They are now running down at the rate of about 1 million tons a week—three times the normal rate. Moreover, 800,000 tons of coal each week were being moved to the power stations by rail following the miners' overtime ban, and the ASLEF action is already threatening those deliveries.
It is coal and not oil upon which we depend for the production of steel. About 75 per cent. of our total crude steel production relies upon the coking method, and the rest on electric are furnaces.

Mr. Elystan Morgan: Mr. Elystan Morgan (Cardigan) rose—

The Prime Minister: Deliveries of coking coal over the past four weeks have already fallen by 35 per cent. The


result is that steel production is being cut by almost half.
Those are the facts and figures of the present situation. It was on those figures that we based the action I announced last Thursday. We could not let the situation continue. We had to take immediate and decisive action.
Without these measures, widespread and indiscriminate electricity disconnections would have been inevitable before many weeks had passed. That would have meant a real threat to the survival of essential services.
With these measures, we should be able to secure——

Mrs. Renée Short: Will the Prime Minister give way?

The Prime Minister: This is a grave national situation, which I suggest——

Mrs. Short: Mrs. Short rose——

Mr. Speaker: Order. The Prime Minister is not giving way. The hon. Lady must resume her seat.

The Prime Minister: The right hon. Gentleman has asked for the facts of the case and I have given them, serious as they are, to the House. I have said that we could not let this situation continue. We had to take immediate and decisive action. [Interruption.] Will the hon. Gentleman just give me the courtesy of allowing me to tell the House the facts of the case?
Without these measures, there would have been widespread and indiscriminate electricity disconnections. They would have been inevitable before many weeks passed, and they would have meant a real threat to the survival of essential services.
With these measures, we should be able to secure a 20 per cent. reduction in our electricity consumption. If we can achieve this reduction, we shall reduce coal consumption by about 400,000 tons of coal a week. On our present calculations this will be sufficient to enable us to maintain essential services and to get us through the winter and into the spring.
If these measures are not sufficient, further limitations will have to be imposed.
This short-term situation is not, then, the product of shortages in oil imposed from outside: it is internal and domestic. We ourselves as a country must solve it. We must solve it in a way which leaves us in a position where we are able, as soon as possible, to resume the expansion of our productive capacity, and the growth of our exports. But I must say to the right hon. Gentleman the Leader of the Opposition and those who have interrupted that we cannot hope to achieve that if we simply ignore the central issue that faces us as a nation.
We have to deal with inflation—[Interruption.]
The right hon. Gentleman has publicly stated in the past week that no Government can have control over the prices of raw materials or food which we import. Very well. We all know that the main domestic cause of price increases is the rise in the level of wages.
Everybody knows that we have to find a way of settling wage increases which are within what the nation can afford, which are fair to the groups involved, certainly, but which are also fair to the rest of the community as well as being fair to those who are working in industry.
Stage 3 is not an end in itself. I have never ruled out the possibility that if the situation required or justified it the Government would ask Parliament for a revision of the code's provisions, but I have to tell the House and the country frankly that if any revision is justified by our current circumstances the only logical conclusion is that there should be a greater number of restrictions on the pay increases authorised in the code, not fewer, and that the increases permitted should be less, not more.
Our present difficulties cannot be solved by giving way to wage demands which go beyond what the nation can reasonably afford. That leads inevitably to a situation which would be infinitely more damaging to the national economy and our living standards than the situation that faces us now.
The miners' own experience shows this to be true. At the time of Wilberforce, wage rates and earnings had increased by 11·8 per cent. over the previous year. By October—six months after Wilberforce—wage rates had escalated so that


they stood 17·3 per cent. higher than 12 months earlier; by November, earnings were 16·6 per cent. higher. All of this followed Wilberforce. In that time major settlements to the railwaymen, engineers, construction workers and local authority manual workers in the wake of Wilberforce were already contributing to the erosion of the miners' relative advantage in the vain free-for-all that followed.

Mr. J. D. Concannon: Mr. J. D. Concannon (Mansfield) rose——

Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. The right hon. Gentleman the Prime Minister is not giving way.

The Prime Minister: All the evidence suggests that without stage 3—and I have given the House the facts and figures on the Wilberforce award and what happened after it—we should be poised to resume the same self-destructive process.
The right hon. Gentleman the Leader of the Opposition has lost no opportunity recently to complain about the alleged rigidity of stage 3 and to ask for greater flexibility. This argument does not stand up. The truth is that Stage 3 is already as flexible as it could be, given the need for some kind of effective restraint on incomes as well as on prices. It makes provision for the lower paid; for those who work inconvenient hours; for those who are caught by anomalies in stage 1; and for those who can improve the efficiency of their work. Finally, it makes provision against erosion of living standards by rises beyond a certain point in the cost of living. All these provisions are permitted under stage 3. All are included in the offer made to the miners.
The fact is that anyone who argues that stage 3 should be more flexible is, in effect, arguing that there should be no prices and incomes policy at all. [HON. MEMBERS: "Oh."] Yes, that is the argument—that there should be no incomes policy and no limits on incomes of any kind. Who would benefit from such a situation? We know who would not benefit—and that is the vast majority of working people in this country. Tom Jackson put this very well last week—

[Interruption.] I know that Labour Members do not like to hear these things quoted, but this is what he said:
I believe if this stage 3 is broken"—[Interruption.]

Mr. Deputy Speaker: Order. Fun and games are very well in their proper place, but there is a great deal to be heard.

The Prime Minister: I shall give the quotation to the House. Mr. Jackson said:
I believe if this stage 3 is broken as far as the vast majority of workers is concerned they will have a worse deal than they would if stage 3 remains. If stage 3 is broken those who break it will probably surge forward in terms of wages whereas the rest of us may not be able to do so and if that happens we'll be in a much worse situation relatively in the future than we are at this moment".
Two-and-three-quarter million other people have already shown that they agree with that statement by accepting stage 3 arrangements.
But there is a wider and more important point to be considered. We have a situation where the miners and the train drivers are, through their action, inflicting serious hardship on other people in this country and serious damage on the country as a whole. If the miners and their families were suffering great hardship, one would see that they might feel compelled to take this kind of action. But no one is making that claim; no one is using that argument—certainly it was not an argument used by the National Union of Mineworkers when the union came to its two discussions with me at No. 10 Downing Street. What the miners and the train drivers are concerned with is not absolute hardship but their relative position compared to other workers. It is for the sake of a relative position that they are taking this dangerous action.
In an article in The Times yesterday Mr. David Basnett said that the issue in the coal miners' dispute was that
the miners want the restoration of their relative earnings position, which was recognised as justified by the impartial Wilberforce inquiry".
If that is the issue, I can tell Mr. Basnett that the dispute can stop tomorrow. The National Coal Board's offer would restore the miners' relative earning position as it was directly after Wilberforce, and indeed it would improve upon it. All the comparisons


between manufacturing industry and the mining industry, after both have received stage 3, show that the miners would be in a better position relatively than they were after Wilberforce.
The miners and the train drivers are not the only people who are worried about their relative position. Nor, indeed, are they the only people who have the power to inflict this kind of hardship on the community. The farmworkers, for example, are indispensable to our production of food. Many trade unionists are just as necessary as are the train drivers for the running of our transport system. Therefore, the argument that the miners or the train drivers are unique cannot be sustained, and it has never been accepted by the rest of the trade union movement.

Mr. Eric S. Heffer: rose—

The Prime Minister: It amounts to saying that the Government should accept the demands——

Mr. Heffer: Mr. Heffer rose——

Hon. Members: Give way !

Mr. Deputy Speaker: Order. No doubt the point of view of the hon. Member for Liverpool, Walton (Mr. Heffer) will be expressed in due course, but if the Prime Minister is not heard it will be very much later.

The Prime Minister: It is a claim that has never been accepted by any other part of the trade union movement. I recognise the difficulties of these workers and I have described the consequences of not recognising the situation. It amounts to saying that the Government should accept the demands of particular groups, not because those demands are just, or even because those groups have a particular importance in the community, but just because they are willing to use their power in a way that is dangerous to the community as a whole. I ask the miners and the train drivers to ponder this matter very seriously.
There are regular talks with the CBI and the TUC in the National Economic Development Council. These discussions will continue this Friday. Both I and my colleagues will be willing to meet both the TUC and the CBI, together or

separately, whenever they think right, to seek a way through this grave situation in the interests of the nation as a whole.
I must add this: for 18 months now we have had the most intensive and detailed discussions with the TUC and the CBI which any Government have ever had. As a result, we have deliberately pursued policies designed to meet as many of their desires as possible, in particular, the policy of expansion, major reductions in unemployment, help for the social services, subsidies for nationalised industries, and price, profit and dividend control. In these talks we have not been able to agree on every aspect, but, as the parties will agree, we have met many of the major points put to us. My right hon. Friend the Chancellor of the Exchequer did so again in the measures he announced yesterday.

Mr. William Molloy: No.

The Prime Minister: Indeed he did. He has done nothing to tax the incomes of the trade unionists, nor has he done anything through indirect taxation which will affect their expenditure.
In the talks we recognised that neither side can expect everything. I recognise that the Opposition will be satisfied with nothing less than their own extreme Socalist policies, but those are not what this Government were elected to pursue. As far as the unions are concerned, at no time in the talks have they been able to guarantee that they will pursue an agreed line of policy in any circumstances. Again, I fully respect their difficulties, but I would suggest that the Government are entitled to some response for what they have attempted to achieve in reply to the points put to them by the union leaders. I hope that that response can be forthcoming.
I told the nation last Thursday that this is the time for national unity. In his speech the right hon. Gentleman replied to that, in agreement. I believe, therefore, that the right course is to carry on discussions with both sides of industry on how we can deal with the present situation and how we can rebuild when it is over.
As a nation, we have real prospects and opportunities ahead of us, thanks to the availability of energy supplies which


will shortly be within our control, but we shall not be in a position to take those opportunities if we seek to tackle our immediate problems either by feebly giving way to inflation or, in anything but the short term, abandoning plans for expansion. The right economic strategy—[HON. MEMBERS: "A three-day working week?"] The three-day working can end immediately the industrial strife stops. The right economic strategy for this country is to continue the fight to reduce our domestically-caused inflation, to resume the expansion of the economy and the growth of output, to maintain the industrial investments on which our future prosperity and competitiveness depend and to increase our exports still further to pay for the oil and raw materials which we need to import.
Only by following this strategy can we hope to avoid a disastrous and permanent lowering of the living standards of all our people. It must be clear by now to all, except a handful of people, that the right political and social strategy for the country is one of moderation and of good sense. We are in a situation where moderate men and women should no longer stay silent. Increasingly in the weeks to come their voices will be heard.
The measures which I announced last week and the measures which my right hon. Friend the Chancellor of the Exchequer announced yesterday are severe because they are designed to meet an immediate crisis. But they were also designed to hold a fair balance between different sections of the community in our present difficulties. That is in the spirit in which we shall continue to govern and it is in that spirit that we can claim and expect the support of the whole British people.

4.43 p.m.

Mr. Harold Wilson: The economic and energy crises that Britain faces today, as the Chancellor of the Exchequer and others have made clear, are the gravest since the war. I do not propose today to spend much time on the causes which have brought us to this position, whether outside events or policies and actions within this country. This debate is not an inquest. It is a time for fearlessly analysing the situation which confronts us and attempting to find a

national answer to a challenge to us as a nation. This means attempting to judge whether the measures now proposed by the Government on energy and on the economic situation are relevant and adequate.
We are debating not one crisis but three. There is the short-run crisis arising from the disputes in coalmining, the railways and electricity—short-run because we all pray they will quickly be resolved. There is the wider energy crisis arising from the oil situation, both the inordinate increase in the price of oil and the deliberate withholding of supplies. There is also the deeper and more fundamental economic crisis arising both from world factors and from domestic policies and attitudes, a crisis which in its turn is aggravated by the new oil threat. It is to confuse counsel and to bewilder the nation to represent all these three crises, as Ministers are doing, as a single problem of bloody-mindedness in the coalfields.
The principal problems we face—inflation, balance of payments deficit, productivity and responsibilities on both sides of industry have been endemic and worsening long before the impact of oil and the industrial situation brought home the realities to the nation. The Chancellor of the Exchequer as good as admitted this in his answer to my right hon. Friend the right hon. and learned Member for Aberavon (Mr. John Morris) yesterday when he said that he would not change yesterday's package if there were an immediate settlement to the industrial dispute. We have to recognise that, while the problems we face are created partly by events and policies within this country, others are created by world causes, largely outside the control of this country. Oil, for example, is one. Again we recognise that world prices of food and raw materials have been affected by cataclysmic changes in supply and demand aggravated by irresponsible speculative activity in this country and abroad. These price tidal waves have been on a world scale.
The right hon. Gentleman was good enough to quote what I said last week about that, but he did not quote my next sentence. I said that even here in the matters affected by world prices the impact in increased food and raw material prices has borne much more heavily on


the British people than it otherwise would have done because of the massive and continuing devaluation of the pound brought about by, and since, the floating of sterling 18 months ago. Even the Prime Minister will not deny that other items in the family cost of living, particularly housing, are attributable to Government action—both rent legislation and the failure to deal with the problems of land, mortgages and the structural problems of the building industry, including the "lump". I believe these facts to be inescapable. Other hon. Members will give their version of what they believe to be the main problems facing Britain.
Our balance of trade and payments is running this year at its worst figure in our history and will worsen even further in 1974. Deficits of £1,500 million to £2,000 million cannot be indefinitely covered by costly borrowing. On the borrowing already undertaken, we shall be paying interest at high rates from the new year onwards. Sterling fell last week to its lowest ever figure against the dollar. Barring miracles, this must mean heavy penalties which have to be paid in real money to Commonwealth holders of sterling balances. It also means further increases in the prices of both food and raw materials in this country, providing a further inescapable twist to the inflationary spiral.
Industrial growth, to which the right hon. Gentleman referred, as the most recent industrial production indices for September and October have shown, was already falling before the miners' action, before the oil cut-off, and it was falling to a rate far below the Government's targets before those events occurred. Moreover, acute capacity problems, including shortages of materials, components, labour and packaging were beginning to create serious shortages of goods, export investment, building and construction.
Again, even within the Government's so-called growth figures, production has been badly distorted between essential and totally inessential economic activity. Scarce resources have been ploughed into office blocks and property speculation while industrial investment and production for export and for use have languished, and investment is still not up to 1970 or even 1969.
Before the effects of the oil situation or of industrial action, before yesterday's Budget, social investment was being cut, first in an unplanned way and then by deliberate Government decisions, announced by the right hon. Gentleman. Schools, hospitals, house building, health centres, old people's hostels—all were being cut back even before yesterday. Social investment was suffering from causes generated within this country. For a number of reasons, aggravated by the rigid pay policies of stages 1 2 and 3, essential public services in our large urban areas were suffering through an inability to recruit labour. That, too, was the case before the overtime ban.
The facts have been given in our previous debates, and they are worsening week by week. Industrial relations have been embittered on a scale not known in the post-war generation by the applicaion of the Industrial Relations Act, by the imprisonment of the five dockers, which led to the costly and unnecessary dock strike, by the rail ballot and by the sequestration of protected trade union funds.
The pay and prices machinery has entirely failed to control prices and rents, the two principal items in the average family budget. Under the statutory policy, prices have been, and are, rising more rapidly even than before the policy was introduced. Rents have been deliberately forced up by the Government's Housing Finance Act; house prices have soared, and present mortgage interest rates have driven owner-occupation beyond the dreams of a large proportion of newly-married couples.
The balance of payments deficit, forecast for 1974 at a figure of over £2,000 million, could be worsened still further by developments within the Common Market which are now occurring. In two weeks' time, the agreed cut in the Common Market tariffs will further weight the scales against Britain because its tariffs against our goods average 8 per cent. whereas our tariffs against its goods average 12½ per cent. Thus, the flow of trade across the Channel is likely to continue to worsen against us. Our position will worsen still further with the further cuts which are to take place in Commonwealth preferences to bring them closer to the Common Market tariff.
Britain's critical vulnerability is shown in monetary as well as trade terms. Last year British private gross investment abroad reached £1,500 million, and it is running at a rate not much smaller this year. This means that we have to raise the finance both to balance our adverse trade deficit and to meet the private investment which we are permitting across the Channel. To date, it has been financed by hot money, short-term capital from all over the world taking advantage of our high interest rates. The Government dare not lower the interest rate in relation to the rates ruling abroad lest the money flows out and Britain lurches into bankruptcy.
We face, too, a grave risk of an international financial crisis, worsened for Britain by the City's overstretched adventures in the European financial market. Since 1968 the City's accumulated bank accounts have expanded from £22,000 million to over £56,000 million, much of this in banking institutions not subject to the strict control we have always had in this country.
We do not want to enter into an era of competitive currency devaluations and "devil take the hindmost", and I am glad that the Chancellor's measures yesterday took account of this. I am glad that he recognised that situation. But it is a fact that the financial system of the Western world as a whole is more stretched and vulnerable today than at any time in the post-war generation. The standards required in our own banking system are not applied in the European markets. In a Western world subject to grave monetary shocks, there could at any time develop vast financial problems in which a weakened Britain would be in the front line.
This was the menacing situation before we moved into the new and unprecedented dimension created by the oil shortage. The House and the country have had great difficulty in assessing the scale of the oil problem, partly because of the demeanour of Ministers both in Parliament and on the media. The Prime Minister added nothing to our information today. But on 30th October he told the House:
We have received firm assurances from important oil-producing countries that they have no wish whatever to damage this country, and that they will take what steps are within

their power to prevent that happening. We welcome these assurances, which we believe are of great value to us."—[OFFICIAL REPORT, 30th October 1973: Vol. 863, c. 38.]
Does the right hon. Gentleman regard those assurances as still binding? Were they valueless then, or are they no longer valid, or are they still valid? We have a right to know. We have had contradictory estimates both of oil stocks and of oil on the way here, as, indeed, we have had about coal stocks at power stations. We have had the utterances of the Secretary of State for Trade and Industry, rapidly fluctuating from the complacent to the apocalyptic. I hope that the debate will bring forth a frank and ungilded assessment of the oil situation, as accurate as is possible in the present situation.

Mr. Andrew Faulds: rose——

Hon. Members: Give way.

Mr. Wilson: I did not hear any hon. Member opposite telling the Prime Minister to give way, and I will follow his distinguished example.
What we want information about is not only petrol for the motorist and the Government's present assessment of the need for rationing, which seems to fluctuate. Still more important is diesel fuel for road haulage, for public road passenger traffic, the more crowded as more cars desert the road; oil for power stations, for heating homes, offices, factories and schools; oil for industrial process work—one cannot, for example, cut gears or other metal products without oil. We must know more about oil for brickworks, glassworks and others; for agriculture, tractors, farm transport; for the feedstock of industry, the naphtha derivatives, benzine, ethylene, butadiene and the rest, the raw material of our vast plastics and fibre industries.
Could we have some real information about all these things during this debate? Can we have a frank statement, for which we have repeatedly asked, about the activities of multi-national oil companies? We have heard a lot of Ministers' worries about them, and the evidence has grown in the last year or two of multi-nationals acting as supranationals, overriding Governments and behaving as super-States. What has


happened in this country and internationally? Are the multi-nationals acting in accordance with the Government's policies, or thinking only of their own customers and the situation when they get back to competition? Can the Prime Minister tell us who is in charge—the Government or multi-national companies?
It is against this background of what I believe to be undeniable fact, aggravated now by the oil and industrial situation, that we must assess the Chancellor's autumn Budget of yesterday. We had been led to expect a great attack on the economic and industrial problems facing Britain. What the nation looked for was a programme which would unite all our people on the basis of fair shares and common burdens commonly borne.
What did we get? We got the lowest common denominator of a tired and demoralised and, as we saw last week, panicky Government. In the whole of the 45 minutes taken yesterday by the Chancellor, nothing was produced to deal with food prices or with rents. It is true that at last he announced some complicated measures against property speculation. Well, well, well! After the number of times we have pressed the Government to take action, all we have got now is the application of cosmetics to the unpleasant and unattractive face of property speculation, with an expected yield to the Treasury of £85 million in a full year. [HON. MEMBERS: £80 million.] No doubt it is inflation. If this is all the Treasury can work out, then the Government should instead have instituted our policy and announced that all land required for development and redevelopment, social investment, and the rest, would be taken into public ownership at a cost related to existing use value.
While the right hon. Gentleman was on this subject yesterday he could have renounced the stage 3 decontrol of office rents which has caused a lot of the difficulty. Had he done so we might have thought that he meant business. Other parts of his Budget statement remain obscure even today—clear evidence that the Government were totally unprepared for the situation that has arisen. It was like the state of emergency a month ago. It was timed, like the Prime Minister's

statement on Thursday, as another instant response to a month's bad trade figures.
What exactly was the Chancellor trying to tell us yesterday about coal and electricity prices? What has he in mind? He referred to subsidies "at a mounting rate". Is he trying to tell us that the subsidies will be eliminated and that all our people must expect a large increase in prices, with some kind of means-tested FIS relief, or is he saying only that he will stop the subsidy from rising above the present level? We must have some clarity during this debate because this is inflationary, and the right hon. Gentleman knows it.
Again, the Chancellor of the Exchequer referred to steel investment. I think that the Government benches will agree that the biggest limit on full production for many months past has been the shortage of steel not only in this country but abroad. We should like to know exactly what the cut-back in steel investment will mean for Britain's ability and for the investment programme.
On direct taxation, all the Chancellor of the Exchequer announced was a 10 per cent. surcharge on a surtax that has already gone—a kind of after-glow. It is the only recorded case in fiscal history of a posthumous, retrospective exhumation of a dead tax.
The guts of the Chancellor's proposals are to be found in the reductions in projected public expenditure. I take it that these massive apparent cuts in public expenditure are real. Indeed, I fear that they are. But the Select Committee has received evidence that this year's—not next year's—public expenditure estimates are already not being fulfilled to the tune of an annual rate of about £1,500 million. We all know from our own constituencies the back-log in housing, school building, hospitals and other social investment. Is this the old Treasury game of legitimising on unspent margin?

Mr. J. Bruce-Gardyne: Will the right hon. Gentleman give way?

Mr. Wilson: The Prime Minister did not give way. I do not propose to do so either.

Mr. Bruce-Gardyne: Mr. Bruce-Gardyne rose——

Mr. Deputy Speaker: Order.

Mr. Bruce-Gardyne: On a point of order, Mr. Deputy Speaker. The right hon. Gentleman is purporting to quote from a report of the Expenditure Committee which, in fact, he has misquoted. Is it not the custom of the House that he should lay all the documents before the House so that the House may judge for itself?

Mr. Wilson: Further to that point of order——

Mr. Deputy Speaker: I was about to rule that the point is not one of order. It is a point that should never have been put.

Mr. Wilson: Further to that non-point of order, I was quoting from the minutes of evidence before the Expenditure Committee which have been published by the Committee. I was asking whether there is a bogus element in the cut in expenditure because of the Treasury claiming credit for unspent margins. I wish I could feel that that was the answer, but if the Chancellor's statement means anything at all—and he intended it to mean something—he has used this crisis to force on the country a series of grave cuts in social expenditure.
There is a cut of £19 million on "Trade, Industry and Employment". We should like to know more about this, especially after what I regarded as the sinister warning about the regions that the chancellor gave in answer to my right hon. Friend the Member for Birkenhead (Mr. Dell). We should like to know more about the cut in "other environmental services" of £148 million. What do these cuts constitute? There is a cut of £182 million in education. There are threats to cut the rate support grant, which can only mean an additional rate burden on millions of householders. There is the cut of £111 million in health, social services, hospitals, health centres and other personal services. We recall the Prime Minister in his extra-parliamentary mini-Budget at Lancaster House announcing cut-backs in school building, hospital building, old people's homes, nursery schools and classes. Does yesterday's announcement mean a further cut over and above the Prime Minister's cut, or are they one and the same?
Apart from the surtax surcharge, other action was open to the Chancellor.

Last Friday, in setting out the proposals that I felt could form part of a national programme for fighting the crisis, I said that the Chancellor should retrieve for the public purse the £300 million handed out as a supplement to the take-home pay of the wealthier taxpayers and the at-home pay of those living on investment income. I said that he should retrieve for the public purse the tax remissions granted in his decisions about the aggregation of child income within wealthy families, and the grant of tax deduction in respect of interest on overdrafts so much of which is incurred for speculative purposes.
I know that a Chancellor when producing a Budget has to balance at the margin his proposed changes in public expenditure against prospective changes in tax revenue. The condemnation of the Chancellor's Budget yesterday means that when he was juggling his respective proposals for revenue and expenditure he decided not to revoke his previous over-generous tax concessions to the rich but to reduce an equivalent amount of essential social spending on education, health, law and order—and environmental services, which when spelt out in detail are related to the quality of life in our cities and towns and the countryside. This he has done at a time of national crisis when he should have been seeking to unify the country. That this was his value judgment suggests to me that he has learnt nothing and forgotten nothing since his divisive mini-Budget of October 1970—milk-snatching and the rest. It means that when the Government are up against it and unable to rely upon printed money it is "Selsdon man" all over again.
The Chancellor had a margin of between £400 million and £500 million to meet. It could have come from a reversal of concessions to wealthier taxpayers. He chose to cut it from education, health, environmental and municipal services. We wonder why this is a divided country. If the Chancellor needed some symbolic, or more than symbolic, cuts in public expenditure to impress our creditors abroad, why not Maplin? I know that the Government tell us that it is only £1 million this year and £2 million the next, but that is how big spending programmes begin. If he had announced that Maplin had been postponed he might


have been more impressive. Why not put an immediate stop on the current version of the Channel Tunnel, a project which the Government are falling over themselves to start?
My final comment on the Chancellor's statement is that its frivolity is proved by the fact that he has not swept away the farce of organised anarchy in the City which he set up in 1971 under the heading of competition and credit control. Farce it is, though for young families seeking a mortgage it is a tragedy. He should restore orderly borrowing control based on priorities, as carried out under successive Governments in different periods, including capital issues, and at the same time clean up the underworld of secondary banking. So the Chancellor missed a great opportunity yesterday. Instead of rising to the occasion, he reduced it to his level and rode it. There is nothing in yesterday's statement to unite the country.
I think that the whole House will agree that whenever before Britain has been faced with crisis and danger we have faced it as one national community working for the good of the nation as a whole. For that spirit and determination to be invoked today, there are three overriding requirements.
First, there must be a common, nationwide effort. No one can be allowed to opt out. No one can sit back and enjoy the fruits of the labours of others.
Second, that effort must be directed to maintaining full employment within the limits set by our energy supplies. No one, whether for private profit or for any other motive, has the right to exploit our national difficulties for sectional advantage. That includes the property speculators.
Third—[Interruption.] Conservative hon. Members are getting upset. I am talking about the conditions for a united country and not a divided country. Third, a common nation-wide effort must be directed to fighting inflation as an overriding task. That means Government policies specifically directed to dealing with food prices, the cost of housing and all other household essentials. It means that the old, the sick, the disabled and others unable to withstand economic pressures should be protected. It means that the greatest burdens and sacrifices

must be borne by those with the broadest backs.
The programme which I put to the Prime Minister is, first, the breaking of the cycle of inflationary costs, claims and counter-claims. There must be subsidies on main essential foods. There must be much stricter control of essential foods and other prices at all levels—namely, production, wholesale and retail. Gross retail percentage margins conceded in stage 2 must be replaced by strictly controlled cash margins.
Second, rents and mortgage interest rates must be put under strict control. Repeal or sterilisation must take place of those parts of the Housing Finance Act which require the imposition of steadily increasing house rents. There must be control of the flow of funds in the City to ensure that borrowing for essential purposes takes priority over borrowing for speculation or monetary manoeuvring, second mortgage rackets and the rest. High in the priority categories must be provision for all funds needed for mortgages for owner-occupiers, for local authority house building and for all the houses in a programme based on need and related to the supply of materials and manpower available. There must be Government action to ensure that the land is available at or near existing use values. Building costs must be controlled by outlawing labour-only subcontracting.
Third, the poison must be extracted from the industrial scene by repealing or sterilising the provocative sections of the Industrial Relations Act. Pending that, the Government must regularise their existing policy by announcing that no Minister will activate any section of the Act involving recourse to penal provisions. In fact, they have been trying not to do so for a long time. They must announce that that will be their policy. The Act must be placed beyond the reach of private entrepreneurs. That is what we ask the Government to do with the Act before a Labour Government cuts its dirty throat.
Fourth, there must be protection from inflation for everyone covered by social security legislation. The Prime Minister knows that it is my proposal that pensioners and others should now be


brought within the threshold provisions of stage 3. They should be entitled to weekly increases in pensions for every percentage increase in the retail price index beyond 7 per cent. over the October 1973 level. Most commentators think that that will occur in the early spring.
Fifth, to get the necessary taxation to enable such measures to be made, and for food subsidies, the Government must claw back the 1971–73 handouts to the very wealthy. They must introduce a tax, not a tickle, on the land and property speculators.
Sixth, we have urged on the Prime Minister to appoint a senior Cabinet Minister as Minister of Fuel and Energy, responsible only to the Prime Minister. His directive should include full responsibility for North Sea and Celtic Seas gas and oil, with the use of quasi-wartime powers to ensure speedy construction and exploitation; the development of new coal seams; the construction of oil from coal plants; and the power to issue directions to multi-national companies.
I now turn to the major issue of stage 3 and the current damaging industrial action. Stage 3 has become the Maginot Line of the Government's defences. Far from providing national protection, it has become, as we warned it would, a national liability. I do not intend to go over all the reasons which we gave for opposing it. The Government must know, as British and American experience has shown, that it is possible to institute a total freeze for a limited time. That can be done just once. In fact, last year's freeze was a wage freeze only. Food prices, rents, house prices, land and property costs soared during that so-called freeze. Such a freeze can be succeeded by a period of severe restraint, but every month brings fresh anomalies, strains and injustices.
Both sides of the House have had such experience. Every nation finds that the second or third succession of freeze, severe restraints and norms is harder to impose and to make succeed than the first. Stage 3 is dead as an effective instrument. It is breaking down, first, because during stage 3 prices and the

cost of living of an ordinary family rose faster than ever. It is breaking down because it is creating more anomalies than it removes.
I understand that the Government hoped that the power station staffs' dispute, which is a real and serious dispute, could be resolved with the long-awaited Pay Board anomalies report. That report has now been deferred for a further month. The dispute continues. I put to the Prime Minister, with respect, that he cannot remove from Parliament all control over vital and central sections of our national life and welfare, and transfer the responsibility to an extra-parliamentary administrative tribunal which is not accountable to Parliament, and then suffer delays of this kind over which no one has any control, not even the Government, while Parliament is in balk and a waiting Britain shivers.
Hon. Members will have read evidence last week that the Pay Board itself recognises that it can exercise only a short-run responsibility until accumulated anomalies and injustices overwhelm its work.
Stage 3 is breaking down because the Pay Board's statutory mandate confines its activities to a legalistic code.
There is no provision, for example, as there was in the mandate which we gave to the National Prices and Incomes Board to have regard to the problem of manpower shortage, wastage and recruitment. Not only did we do that in the 1960s, but in Sir Stafford Cripps' first White Paper in 1948 there was, as a first instruction to the authorities concerned, the matter of manning-up all under-manned industries. That is excluded from all the Government's instructions to the Pay Board, which is an extra-parliamentary body. If there had been such an instruction to the Pay Board it would be inconceivable that, with the present energy situation, with coal prices going up, with a shortage of trained manpower and——

Mr. F. A. Burden: Lord Robens says that you are the guilty man.

Mr. Wilson: —the mounting problem of recruitment——

Mr. Burden: Lord Robens says that you are the guilty man.

Mr. Wilson: I was trying to explain to the more sober Members——

Mr. Burden: Lord Robens says that you are the guilty man.

Mr. Deputy Speaker: Order.

Mr. Burden: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. An interjection made from a sedentary position is not made better by being made three times.

Mr. Burden: Mr. Deputy Speaker, I was objecting to something——

Mr. Deputy Speaker: Order. Is this a point of order?

Mr. Burden: Is it right for the right hon. Gentleman to suggest that I or any other hon. Member is not sober? [HON. MEMBERS: "Yes."] Further to that point of order—[Interruption.]—

Mr. Deputy Speaker: Order. If this is a point of order, may I please hear it?

Mr. Burden: Further to that point of order, Mr. Deputy Speaker. If the Leader of the Opposition thinks that I am not sober, he should look in the mirror.

Mr. Deputy Speaker: The hon. Member for Gillingham (Mr. Burden) knows that he is cheating in this respect in that he is depriving his hon. Friends of an opportunity to speak later. Mr. Harold Wilson.

Mr. Wilson: Mr. Wilson rose——

Mr. Kenneth Lewis: Further to that point of order——

Mr. Deputy Speaker: Order. There was no point of order, and I had called the Leader of the Opposition.

Mr. Lewis: Then, on a point of order, Mr. Deputy Speaker. You suggested just now that my hon. Friend the Member for Gillingham (Mr. Burden) had no right to object on a point of order to a comment by the Leader of the Opposition which in my view was wholly out of order since the right hon. Gentleman was expressing——

Mr. Deputy Speaker: Order. I heard nothing that was out of order.

Mr. Wilson: Mr. Wilson rose——

Hon. Members: Withdraw!

Mr. Wilson: I did not say that the hon. Member for Gillingham (Mr. Burden) was not sober. I was referring to "the more sober Members of the House".
Perhaps I might now be allowed to go back to the beginning of what I realise was a rather long sentence which the hon. Member for Gillingham interrupted. If the Pay Board in making its determinations had the instruction to pay attention to manpower in important industries I suggest that with the present energy situation, with the drain of manpower and the mounting problems of recruitment, with the likelihood on present form of at least 500 million tons of newly discovered Yorkshire coal remaining unworked because the miners will not be there, it would be inconceivable to have the present situation with the National Coal Board and not to have a settlement of the coal dispute by this time.
The extraordinary feature is that this dispute has reached such grave proportions, leading to a Government-decreed three-day week, without even the Pay Board's advice and ruling being sought. In a letter to me about a proposal which was already publicly before the nation and which was already being canvassed as a means to a solution, the Prime Minister admitted that the decision would be for the Pay Board, and at the same time expressed his own firm personal opinion that it would be ruled out by the Pay Board. How extra-parliamentary can the situation become?
Why was this proposal not submitted to the Pay Board? If it had turned it down, we would at least have known where the power lay and where lay the responsibility for the present paralysis of British industry, now on a three-day week imposed by the Prime Minister with no consultation with management and no consultation with the unions before he announced it.
Stage 3 is being evaded without check or challenge by scores upon scores of employers in search of labour, in many cases themselves seeking men to replace those who have been lured away by others, or seeking to hold labour that they had. Essential public services are


nearing breaking point through the loss of men. Public bodies, public industry and local authorities cannot poach labour by breaking the pay code in this way. They and the essential services and industries for which they are statutorily responsible are at the mercy of other private employers who are not so inhibited.
The nation is facing a grave crisis. We should not have had the Prime Minister's statement last Thursday, his ministerial broadcast and the Chancellor's statement were that not so. The crisis is far wider than the issues raised by stage 3. It is the Prime Minister who has sought to concentrate public discussion away from these wider issues to the special case of the mineworkers' overtime ban. We suggest that leadership should be directed to solving problems, not to finding scapegoats, and not to making deep economic and human issues a simple question of the law. Repeatedly I have said that the law must be obeyed, however obnoxious. But no one is breaking the law. Observance of the law is not the issue here. The duty of this House and of the Government, when the law is an obnoxious law and creating great harm, is to change the law. That must be done with stage 3, and it must be done urgently.
I do not believe that the country wants to see Britain crucified on an ill-considered legal enactment which is already failing in its purpose. Perhaps this might help the Government. Even those who defended it in October when it was enunciated must now see that events since last October, including those over which the country and the Government can have no control, now render what might have appeared right to the Government in October to be unjust and inoperable—inoperable save on the basis of an invocation of the law in circumstances which would compound and escalate all the bitterness which already infests our industrial relations. This can be avoided. Britain can return to full working within such limitations as may still be imposed by the shortage of oil and later by the balance of payments.
I therefore appeal to the Prime Minister to reconsider his rejection of the proposal which I put to him in the House on Thursday. I hope that on consideration

he regrets the implication of his suggestion then that it was improper, if not downright unconstitutional, to make proposals in this House for the resolving of an industrial dispute. He was never backward in doing so himself. If the dispute is so grave that he rests on its continuance the responsibility for imposing on industry a three-day week, if a dispute occurs because of fundamental causes some of which cannot be resolved without legislation and other action by this House, he must recognise not only the right but the duty of right hon. and hon. Members in this House to propose any solution that they feel to be right.
I ask the Prime Minister to make clear that if the mineworkers, the power supervisors and the train drivers will resume normal working he will authorise the Secretary of State for Employment to resume the traditional rôle of his Department over the years—conciliation and not confrontation—and authorise him in that rôle to meet them and to examine the situation that we have reached with sufficient flexibility to interpret or to vary the unreal rigidities of stage 3 for the purpose of reaching a responsible agreement, because I should never expect the Secretary of State to reach an irresponsible agreement.
I ask that the Secretary of State be authorised, secondly, to meet the TUC and the CBI, which are approaching the problems in a highly responsible and humane manner, to consider what changes are required in the present situation as it affects industrial relations. I ask the Prime Minister to reject now and for all time the scenario of confrontation and to return to consensus based on conciliation. I trust that the right hon. Gentleman will be prepared to consider this proposal.
I must say to the Prime Minister—and I am sure that many right hon. and hon. Members in all parts of the House agree—that there are no more loyal, patriotic and unselfish people in this country than the mineworkers.

Mr. Burden: Then why did the right hon. Gentleman sell them out?

Mr. Wilson: They have proved this in peace and in war. Many hon. Members have reason to know that after the ill-considered confrontation of February 1972 no one worked harder than the


mineworkers to get the mines back into working order, to get the wheels of industry turning, and to restore stocks.
I feel that the Chancellor in his broadcast last night was unworthy of his office, or any office, when he quoted Britain's wartime leader, Winston Churchill, and went on to equate the miners with the enemies of Britain that Winston Churchill was attacking. The words which he quoted were those used by Winston Churchill referring to the Japanese immediately after Pearl Harbour. I must ask the right hon. Gentleman, hoping that he will withdraw this slur when he speaks later, whether he has forgotten Mr. Churchill's wartime tribute to the miners of Betteshanger, carrying on production under German cross-channel gunfire. If the right hon. Gentleman wants to cite Winston Churchill, what is relevant in this situation is another quotation—not my favourite; it is not a very euphonious one—when he said:
Jaw-jaw is better than war-war.
—in other words, conciliation, not confrontation, within one people.
They are adult people, responsible people, fair-minded people, people who, confronted with a problem or a division, like to see that problem responsibly resolved round a table, and then to put their backs into it. They seek no confrontation.

The Prime Minister: Before the right hon. Gentleman leaves that point, may I ask whether his proposal to me means that the miners are now to be offered more than the 16½ per cent and, if so, how much more? Will he tell the House how he proposes to restrain the rest of trade union claims that will follow a much greater award at a time when he has warned the House and the country that there may be no great increase in production, even without industrial disturbances, because of the limitation on oil supplies?

Mr. Wilson: If the right hon. Gentleman and his Government have now reached the paralysis that they cannot find an answer to the question—[Interruption.]—it is about time—[HON. MEMBERS: "Answer."]—it is about time that we went on to that side of the House as the Government. [HON. MEMBERS: "Answer."] It is a slur on the right hon. Gentleman——

Rear-Admiral Morgan-Giles: Answer.

Mr. Wilson: —and on his predecessors——

Rear-Admiral Morgan-Giles: Answer.

Mr. Deputy Speaker: Order. The hon. and gallant Gentleman must restrain himself.

Mr. Wilson: This must be for the Secretary of State. I believe that he can find the answer. He did in Northern Ireland. We gave the right hon. Gentleman full backing in Northern Ireland. [HON. MEMBERS: "Answer."] I am sure that he will confirm that. [HON. MEMBERS: "Answer."] He is confirming that. The Prime Minister has never asked us to tell the Secretary of State what particular agreement to reach. I believe that he can do this without an inflationary settlement if he is given this flexibility. [HON. MEMBERS: "Answer."] If the right hon. Gentleman is so much the slave of the rigidity of stage 3, it is time that he abolished it and got out of office. [HON. MEMBERS: "Answer."] If hon. Gentlemen want to know—[HON. MEMBERS: "Yes."] If the Secretary of State says that he cannot do it, then let us handle these negotiations and we will do it for him. I believe—[HON. MEMBERS: "Answer."]—I believe that—[Interruption.]——

Mr. Deputy Speaker: Order. I think that there has been quite enough noise The right hon. Gentleman should be allowed to get on.

Mr. Wilson: I believe that the Secretary of State can do it. [HON. MEMBERS: "Answer."]

Mr. Churchill: Mr. Churchill (Stretford) rose——

Mr. Wilson: Unlike hon. Gentlemen opposite, I believe that the Secretary of State can do it, and I am appalled at their lack of faith in him.

Rear-Admiral Morgan-Giles: Will the right hon. Gentleman give way?

Hon. Members: No. Sit down.

Mr. Wilson: The Prime Minister has every reason to know that two or three weeks ago an agreement could have been reached with a relatively small addition to what had been offered.

The Prime Minister: The right hon. Gentleman has absolutely no justification for saying that. The proposal that he put to me would have cost £45 million in addition to the £44 million already offered by the National Coal Board.

Mr. Wilson: The Prime Minister is misleading the House about that. I challenge him to publish my letter to him in which I said "some or all" of that pithead time. The figure that he quotes is for all. He knows that he could have got agreement for a great deal less. The right hon. Gentleman bitched it. Therefore, I leave that to the right hon. Gentleman with confidence. [Interruption.]

Mr. Deputy Speaker: Order.

Mr. Wilson: I was trying to conclude. The people of this country seek no confrontation. They seek co-operation and conciliation. They resent the fact that confrontation has been thrust upon them. So I say to the right hon. Gentleman: let the people decide. Then we can create the conditions—a consensus of a united people—to give a chance—[Interruption.]—hon. Gentlemen opposite want a divided nation—for British muscle and skill to solve the nation's problems.

5.41 p.m.

Mr. J. Enoch Powell: I do not think that anyone would be disposed to deny, and it is one of the few points which at any rate seem to be agreed between the two Front Benches, that, in the last 18 months, this country has been buffeted by a number of forces from outside, over which we could not possibly have had control. One of those is the marked deterioration in our real terms of trade—I mean ignoring all the effects of domestic inflation here or elsewhere—the fact that the things which we import have upon the whole become scarce relatively to what we have to export. The extreme case of this change has been the exploitation by the producers of oil—perhaps a belated exploitation—of their market power, which has further caused our terms of trade to deteriorate.
On top of this longer-term movement, we are now being subjected to a direct and physical limitation of our imported sources of energy. That limitation, as

my right hon. Friend the Prime Minister indicated, is not in itself of extraordinarily large dimensions. Indeed, all these purely external forces are not such as in themselves to have proved disastrous or incapable of being met with our customary resilience and the resources which adversity brings into play.
The wounds from which this country is bleeding today have not been inflicted by an external enemy. They are self-inflicted wounds; they are what we have done to ourselves.
Domestic inflation, the fall in value of our own money, proceeding at what would until recently have seemed the impossible rate of 10 per cent. per annum and upwards, has, in the first place produced a fall in the exchange value of sterling which has done us far more damage than any mere alteration in the real terms of trade. In case anyone, within or without the House, should be tempted to reach for the flattering unction of pointing to other countries and saying "They too have such and such a percentage rate of inflation", we ought to remember that the exchange rates of those countries' currencies rise while ours falls.
In addition, our domestic inflation is the reason for the catastrophic trade deficits, antecedent altogether to the oil crisis, which everyone recognises are a signal set at danger, past which it is absolutely impossible for any Government or any country to drive.
These are the consequences of the internal behaviour of the value of our own money. It is our inflation in this country which has imposed these penalties upon us. Yet even they are not the most serious results of our inflation. Its most dangerous poisoned fruit has been the clash and head-on confrontation, which lies at the heart of the announcement made last Thursday by my right hon. Friend, between the State and great masses of workers engaged in the energy industries, speaking through their unions. It is that clash, the direct result of our cumulative domestic inflation of the last few years, which has brought the House and the country to the pass which we are debating this afternoon.
Let me say first, although it has been said already, even in the opening stages of the debate, that the miners—it is, of


course, primarily to the mineworkers that we refer—are neither in breach of the law of this country nor purporting to intend a breach of the law. They are not in breach of the new law on industrial relations which has been passed in this present Parliament; nor are they in breach of the Counter-Inflation Act which stands on the statute book. So they are acting, whether or not we like the way they act, lawfully.
But, it is said, they are in conflict with Parliament, they are defying Parliament; for Parliament has approved—so it runs—stage 3. I say they are not in conflict with Parliament over stage 3; for anyone who cares to read the law and to understand how stage 3 fits into it can easily satisfy himself that the only direct legal validity of stage 3—the price and pay code—is as that to which attention must be given, to which regard must be had, by the Pay Board and the Price Commission. It is not directly binding upon any citizen: it lays down the general principles to which those agencies under the statute must have regard. So even there it is not possible to argue that there is, at the level of law, a conflict or a confrontation.
Moreover, when this House wrote the code into the Counter-Inflation Act, it wrote it into an Act which reserved ultimate responsibility to Her Majesty's Ministers. In the terms of that Act, the agencies are not left completely free to hurtle down the railway lines of whatever might be the price and pay code. There is expressly reserved—and surely, rightly reserved—to the administration the power to intervene, both before and after the board, in its wider judgment of what the national interest may require.
Over what, then, is it, that there is conflict between the unions and the State, so dangerous, so deep, that it threatens to create massive unemployment and a massive fall in the production of this country? It is the determination, incessantly repeated, of Her Maesty's Ministers that their interpretation of what can be extracted by logic from the interstices of the stage 3 price and pay code shall be the ne plus ultra, the law of the Medes and Persians, and that nothing beyond that shall be regarded as in any way reconcilable with the national interest and the national salvation. It is in pursuit of the Ministers' interpretation of statutory control of wages that

we have been brought into this conflict, the conflict of which the consequences are not merely before us but are bringing anxiety to every family in the country.
It was not ever so. In 1970 my right hon. Friend the Prime Minister, and all of us who sit on these benches on the Government side of the House, said to the country
We utterly reject the philosophy of compulsory wage control,
or again—
Labour's compulsory wage control was a failure"—
the right hon. Gentleman the Leader of the Opposition was very fair and candid this afternoon in his reference to the experience which his Government and the country shared in the last half of the 1960s—
and we will not repeat it.
Why did we say those things so emphatically, over and over again, to the country in 1970? We said them on the basis of what we had argued, experienced, seen and watched over the preceding years. We said them out of a conviction, often stated, that the inevitable result of combining inflation with the attempt to control it by compulsory control of wages was bound to be the most damaging and irresolvable conflict between State and citizens. We said them because—I invite my hon. Friends to refresh their memories on the context—we were convinced in those days that inflation was the result, overwhelmingly, almost exclusively, of actions and policies which were within the power and control of Government. It was because we were convinced that if Government, for their part, would so manage the finances of the nation, if they would so frame the policies within their control, within their hands, there would, indeed, be industrial conflicts, there would be collective bargaining, carried no doubt sometimes to the use of the strike weapon, and there would be the attempt, natural and inevitable, to reassess and reassess again the real relativities between the wages of one industry and another and those of one job and another, but we would not be bringing into the arena of direct conflict between Government and citizen every wage dispute, every bargain, every price and every wage that was fixed We were convinced that responsibilities would


lie where they ought to lie—the responsibility of management and the responsibility of trade union leadership could be exercised where they belonged—if Government would exercise the responsibility which is theirs.
As I listened yesterday afternoon to the speech of my right hon. Friend the Chancellor of the Exchequer, it seemed to me that he was speaking much more in the sense of what we were saying then; that the philosophy which lay behind his words was not the philosophy which we rejected in 1970—the philosophy of compulsory wage control—but the philosophy which we accepted, the philosophy of a Government who so order their own affairs, affairs which no one else can order, that the citizens in turn can arrange theirs in freedom without damaging the State or the national interest.
I do not wish to enter into what is, I think, a superfluous and almost academic argument with my right hon. Friends on the Government Front Bench as to whether Government financing is the sole, or merely overwhelmingly the most important, cause of domestic inflation. I will concede, if it be necessary to get the ground clear, that perhaps there are other minor causes and predisposing conditions. But my right hon. Friend the Chancellor of the Exchequer himself, in the essence of what he was saying yesterday afternoon, was stating that inflation, the problem which existed before the oil crisis and before the miners' strike, the problem with which we would have had to deal in any case—he said so entirely honestly and openly—was a problem which arose predominantly from the manner in which Government had chosen to exercise their powers of taxing and of spending.
In answer to dialogue and Questions my right hon. Friend said to my hon. Friends over and again that his reductions of public expenditure would reduce, pound for pound, the Government's net borrowing requirement. The significance of the £1,200 million—we could all argue as to whether we would have found that amount in the same way, or an even greater amount—but the significance of the turn-round, if I may so put it, of my right hon. Friend the Chancellor's figure—as was evident to the House—is that it would alter the

whole proportions of the Government's borrowing posture and would thereby affect the money-creating function of the State, so that the State would be able once again to regain control of the total increase of money demand in the economy over the coming 12 and 18 months. My right hon. Friend, in fact, was introducing measures which in his view were necessary in order to provide a monetary framework, a framework within which there could not be domestic inflation of the dimensions which we have experienced, a framework within which, as we envisaged in 1970, the fatal and foredoomed statutory control of individual wages would be superfluous.

The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): The Lord President of the Council and Leader of the House of Commons (Mr. James Prior) indicated dissent.

Mr. Powell: I am sorry to see my right hon. Friend the Lord President of the Council shaking his head, but perhaps we may at least agree on this: there can be different interpretations of the same measures, measures which perhaps we shall both support, and from one interpretation or the other there may spring hope for the future. For of this not only we on the Government side of the House are certain but both sides of the House and, I believe, almost the whole of the country—that reconciliation there must be.
One of the greatest men who ever belonged to this House ended one of his greatest speeches by an appeal to the administration of that day to lay the foundation of the Temple of Concord. I believe that, however partially or imperfectly, my right hon. Friend the Chancellor yesterday afternoon began to assemble some of the materials for doing that. I believe that in the measures he proposed to the House, which are designed to eliminate—I say no more—one of the major factors in the domestic inflation which has brought us to this pass, he was opening the way to answer the question which was thrown backwards and forwards between my right hon. Friend the Prime Minister and the Leader of the Opposition, and to answer that question in the way that it ought to be answered, not across the Dispatch Boxes of the House—of course it would be totally childish for a percentage figure to be laid down as a diktat across the Dispatch Boxes in this House—but by


responsible management, acting responsibly, in a framework such that the total wages paid in the economy could not greatly exceed the productive powers of the economy at the time.

Mr. Austen Albu: How?

Hon. Members: A U-turn?

Mr. Powell: It is not a U-turn for me. It may be for other people. My right hon. Friend will not find easy the course upon which he has entered and in which the Government——

The Lord President of the Council and Leader of the House of Commons (Mr. James Prior): When I shook my head at my right hon. Friend, it was because I thought back to the beginning of 1972, when we were last faced with this problem, at a time when this country had 1 million unemployed. Even at that time, when we had a free collective bargaining system which my right hon. Friend is now justifying to the House, it did not work.

Mr. Powell: No, and my right hon. Friend will also recall that at the time we had a rate of domestic inflation of 7 per cent. as well as the unemployment.
The course upon which my right hon. Friends have engaged——

Mr. Reg Prentice: Ministers have accepted, at least in part, the advice that the right hon. Gentleman has given in successive debates. In those debates he has always conceded to the House that part of the price of following his prescription will be an increase in unemployment. Will he now acknowledge that that is likely to happen as a result of what was decided yesterday?

Mr. Powell: One should never give way towards the end of one's speech, because it usually transpires that the point is exactly the one that one was about to make.
I was about to say—I had already begun the sentence—that the course on which my right hon. Friends have embarked is not one which will be easy or, in the short term, popular; for to eliminate a net borrowing requirement which we have had for two years running and which we were likely to have for a third, totalling several thousand million pounds—that is to say, expenditure

of that amount not balanced by real resources—is not something which is easy or pleasant. Moreover—and I am now point—it is a fact, which so far as I know coming to the right hon. Gentleman's no one denies, that to reduce the rate of inflation in an economy from something like 10 per cent. to any figure which we would dare to regard as tolerable, cannot but be accompanied by severe stresses, one of which will be an increase in unemployment. That does not derive from the method by which it is done. It derives from the fact that it is done. That is why my right hon. Friends, in shouldering the burdens of genuinely dealing with the fundamental evil of inflation from which we have suffered in this country have not set out upon an easy or a popular path. Nevertheless, I believe it is one on which they will enjoy the understanding and support of the country, as indeed they ought; for I am sure that one thing beyond all else is desired by the people of this country—that they should be given the conditions under which, at peace with one another, they will be able to meet the demands and the dangers which face them from outside.

6.4 p.m.

Mr. Jeremy Thorpe: The right hon. Member for Wolverhampton, South-West (Mr. Powell) has admitted perfectly plainly and honestly that one of the effects of the economic policy which he is advocating could be, and almost certainly would be, a very large increase in unemployment. I would say to him that, whatever may be the differences between Governments and parties, that is a social cost which this country is not prepared to pay, and rightly so.

Mr. Powell: In that case the right hon. Gentleman is advocating not merely 10 per cent. inflation for ever, but escalating inflation for ever, which is impossible.

Mr. Thorpe: The right hon. Gentleman is suggesting that I am advocating something which is wholly at variance with what I am advocating. The right hon. Gentleman is speaking as if Keynes had never existed. All his economic theories are pre-Keynes. In the present state of the economy, of course, it is correct that we have 10 per cent. inflation, and that it is because our currency has depreciated


at that rate that about £2,000 million is added to the import bill which we have to pay for our raw materials. The right hon. Gentleman is quite correct, and the Prime Minister is wholly wrong in simply throwing up his hands and saying that our difficulty is caused by world prices. The fact is that world prices rise more against us than against some other advanced industrial countries, because our currency has persistently depreciated. I am at one with the right hon. Gentleman in saying that we have to control inflation, but I am not with him in saying that if one has an economic situation which demands the maintenance of full employment in a free society there will inevitably be more than 10 per cent. inflation. I do not accept that, and I will say why in a moment.

Mr. Powell: I apologise to the right hon. Member for interrupting him again, but I did not say what he has just attributed to me. He has just said that he thinks inflation ought to be controlled—that is, that the rate of inflation ought to be brought down. I am just telling him that the inescapable accompaniment of that is an increase in unemployment.

Mr. Thorpe: No. I do not share the right hon. Gentleman's pessimistic view, and I do not think that the experience of other countries which have managed their economies rather better than we have proves his point; if anything it disproves it. I take West Germany as an example, and I can think of others. But I will come to that in a moment. What I was saying was that I accept that the right hon. Gentleman has put forward a logical case, based on pre-Keynesian economics, which is a well-known historical school of thought, but it is not one in which I believe and it is not one which I believe the vast majority of people who have a social conscience, to whichever party they belong, wish to aspire to.
The Prime Minister ended his speech with a defence of the Government's present prices and incomes policy, and equated himself with moderation and good sense. I must confess that I found that a little difficult to appreciate from a Prime Minister who for the first three years of office was passionately opposed to the need for a statutory prices and incomes policy and, indeed, during the currency of the previous Labour Government

opposed every attempt to introduce one. All I would say is that if the Prime Minister's present posture is that of moderation and good sense, his previous position must have been both immoderate and lacking in sense.
It is generally agreed that we are facing one of the gravest crises in the past 40 years. On a reading of the Chancellor's economic statement yesterday, I found it impossible to decide to which situation he was chiefly addressing his mind. Was it largely a short-term problem, caused by the lack of fuel—whether one is talking about the oil embargo or the energy crisis here at home—or was he really dealing with a long-term crisis which would have to be dealt with anyway? Indeed, the answer which he gave to the right hon. Member for Aberavon (Mr. John Morris), to which the Leader of the Opposition has already referred, was extremely significant—that even if there had not been a miners' strike the majority of these measures would now be necessary. The fact remains that a week ago the Chancellor of the Exchequer was slapping down the Director-General of "Neddy", who dared to suggest that our 3½ per cent. growth rate was unattainable. At the same time, the Secretary of State for Trade and Industry was, as usual, being wildly optimistic about oil and energy supplies. I cannot believe that in seven days there has been such a total transformation of the economic situation as to cause these measures to be introduced.
The best explanation is that it has taken the Government a long time to recognise the gravity of the situation. I saw the Secretary of State for Trade and Industry shaking his head upwards and downwards in order to indicate his complete agreement with the Prime Minister, but remembering the Secretary of State's speeches of only a week ago, methinks he doth assent too much.
If we are dealing with a short-term crisis it is vital that these measures should bite at once. But I would have thought that the Government's greatest need was not merely to persuade the people of the need for a prices and incomes policy but to accept a prices and incomes policy which the people regarded as fair. I believe that the people will respond to a degree of restraint provided they feel that the economy is being run


fairly. That is the greatest single prize which any Government should attain.
Psychologically, the Budget could have been the means to achieve this. It could have started a new social contract, and its failure to do this is its greatest defect. That is far more important than the details of the measures themselves. What new arguments have the Government given to the leaders of the unions which are involved in industrial action to persuade them that the economic climate and the measures which the Government are trying to take to distribute wealth and to help those who are suffering from a lack of economic relativity, constitute a new social contract? There are none in the Budget statement.
In the short term, it is clear that the problem is that of the shortage of fuel. If the shortage continues we shall be unable to produce sufficient goods to meet demand. Therefore, since we are unlikely to be able to increase production in the near future—certainly this is so if we have short-time working—there must be measures which damp down demand. They have to be quick-acting and easily reversible, and the hire-purchase and credit controls are therefore probably right. They were inevitable. Longer-term forecasting, however, is much more difficult and it would be difficult for any Government. Previously, the Government committed themselves to growth and were prepared for the price of that growth to be a possible deficit on the balance of payments. I support that strategy. We may well have to choose now between increased unemployment and an increased deficit on the balance of payments.
My money is on a bigger deficit. It will probably be about £2,000 million in 1974, although the Shell Company has suggested that it could be as much as £4,000 million. Much of that will have to be financed by borrowing abroad, but every advanced industrial nation will be in the same boat. It is therefore vital that there should be maximum international co-operation. Here I agreed with the Leader of the Opposition when he said that we were facing a crisis in the international monetary scene. Inevitably, the largest surplus on balance of payments will be shown by the Arab countries. A large amount of that surplus will come back to this country, directly or indirectly,

because there are few other places for it to go. Under the swap arrangements I believe that we shall have an artificial balance of payments situation, not a normal trading balance of payments with which we have been familiar since the war.
Therefore, we must steel ourselves and be prepared for a larger deficit on the balance of payments than we have seen for many years. The alternative is mass unemployment, which is not only socially wasteful, but economically disruptive and possibly immensely harmful not only in the immediate future but in longer-term economic planning in this country.

Mr. Tam Dalyell: May I refer back to the right hon. Gentleman's earlier remarks on the dampening down of demand? May we be clear about one thing? Was the right hon. Gentleman implying that a Liberal Chancellor would raise the standard rate of income tax? There may be special reasons for so doing.

Mr. Thorpe: The answer is "No". I was saying that the Government were right to introduce credit and hire-purchase controls which are probably the best way to damp down demand. The Chancellor is also right not to have increased taxation, although the National Institute has suggested that it may be necessary for something like 3 per cent.—a cost of about £1,500 million—to be spent in forms of subsidy or reduction of tax on necessities with a bigger increase in tax higher up the scale in order to prevent the economy from going into the 7 per cent. threshold provided under phase 3.
The cuts in public expenditure are a major social reverse for this country and if we accept, for the sake of argument, that they are totally necessary, they are an appalling indictment of the management of the economy in the last three years. What worries me is that these cuts will bite in the summer although technically they do not take effect until the financial year starting next April. The summer may well be the moment when all Western countries will be facing recession and our one need will be public expenditure on things with a low import content.
Where the Government are at fault—if the impression they gave is correct—is that there is very little forward planning. I wonder whether they have considered


which are to be the new declining industries as a result of the shortage of oil. The oil shortage will create new declining industries and new growth industries, and this development must be matched by massive retraining schemes and a switch of investment. Still on the point about forward planning, I believe that there is support on both sides of the House for a total review of the country's energy policy and for the appointment to the Cabinet of a Minister who will co-ordinate the exploitation and conservation of our oil supplies. The sort of problem he should tackle is deciding what additional contribution British Railways could make during the energy crisis. Just as the Government have fed into their computer information which caused them to decide on their previous capital projects, they must now feed in the energy component equation, particularly in view of the present crisis.
On the miners, I agree with the Leader of the Opposition; the law is the law, but it is not a good law when it becomes the last ditch, and the Government have got themselves into a bunker-like mentality. If the Government are right to concede—and they would be lunatics not to—that the economics of oil in this country have changed, not merely in regard to price but also over availability, why do they say that the economics of coal have not changed, because that is the logic of what they are saying. We have to review the industry to see why men are leaving it at the rate of 600 a week. They can go elsewhere to higher-paid, cleaner and far less dangerous jobs. We must review the industry to discover how men can be attracted to it and retained, and the sort of benefits and salary scales that are required. I say to the Government that having enough people to mine coal is more important than phase 3.
The Government might have got a response if they had done more to control prices. They must realise that if prices rise, so that we hit the 7 per cent. threshold early on, it will have a disastrous effect on the economy and it will work its way right through the economy. The Price Commission must be strengthened. We may have to surcharge corporations which fail to conform to an agreed pricing policy. There may even have to be a

total price freeze, such as that with which the French experimented in the 1960s. Why the Government should allow continued office building, I know not. This is a non-productive form of capital expenditure which we can do without.
On property, we have had a hotchpotch of measures—the betterment levy, the land hoarding charge, and now the tax on sale or first lease. I should like to see the Government impose taxation on the value of a site, so that society gets back the value which it creates. We are told that £80 million is to be the total yield. Yet in six months the increase in the book value of Land Securities was £267 million. Bearing this in mind, one realises that the latest proposals are extremely small beer.

Mr. George Cunningham: What about London and County?

Mr. Thorpe: I shall answer that point. I was in a bank which got into great difficulties, and I helped to save it.

Mr. Cunningham: If it was so desirable for the right hon. Gentleman to do that, why has he now quit the company?

Mr. Thorpe: I shall explain. I had been wanting for four or five months to give up all my outside commitments. This is well known to my colleagues. But to do this at a certain time could mean doing grave damage to the organisation with which one is connected. There are times when one has a duty and an obligation to people whose interests one looks after. I believe that it was right for me to stay on in London and County until the company was rescued. I hope that if, for example, the Commercial Bank of Wales got into the same problem, the two right hon. Gentlemen involved who sit on the Labour Front Bench would take the same action.

Mr. Hugh Dykes: Mr. Hugh Dykes (Harrow, East) rose——

Mr. Thorpe: Yesterday's economic statement by the Chancellor could have provided the Government with a chance to get a degree of national unity and support for a prices and incomes policy which they have so far failed to achieve.

Mr. Dykes: I am most grateful to the right hon. Gentleman for giving way, as


I know that he wants to get on with his speech. Taking the period before—four or five months ago—the right hon. Gentleman began to change his mind about the institution to which he referred, and bearing in mind his comments about nonproductive office development and building would he describe London and County Securities, since its inception and flotation in the City of London, as a desirable and productive institution?

Mr. Thorpe: If the hon. Gentleman looks through the existing portfolio he will see that included there are industrial holdings which have backed up production in this country and assisted in financing jobs for many people.
The political question is, are the measures designed to lead into a General Election? Are the Government seeking a confrontation with the trade union movement? If we continue in the present atmosphere it might be a good thing to get an election over, on purely political grounds. My colleagues and I would greatly welcome it, but it must be realised that if an election is fought on this package it will be because the Government have admitted that the confrontation between them and the trade union movement is now total.
It would not be a happy outcome for the country. The Government may be able to say that the trade union movement has been from time to time—sometimes frequently—unreasonable, but basically it is the Government who have to weld the nation together. The economic statement was the opportunity to do so.
I hope that the measures will prove adequate to deal with the present emergency, but they will do nothing to remove the bitterness and unreasonableness which lead to the self-inflicted wounds which we have visited upon ourselves in this country.

6.24 p.m.

Mr. Airey Neave: I hope that the Leader of the Liberal Party will forgive me for changing the subject. No doubt some of my hon. Friends will wish to reply to some of the right hon. Gentleman's points.
I agree with the Government in their short-term measures, but when the short-run energy crisis is over big decisions

will have to be taken on energy policy. Therefore, I do not apologise for raising the question of what our nuclear power policy should be. This raises controversial and important issues which the House must decide in a few weeks' time.
I declare an interest in a boilermaking group in the nuclear power industry, and many of my constituents are employed by the Atomic Energy Authority at Harwell.
The first thing which must be understood about nuclear power is highly relevant to what will happen within the next few years. It is that no nuclear system ordered next year could be delivering power before 1981. That is a fundamental fact. The Select Committee of which I am chairman is at present holding an inquiry. I shall refer to the evidence which has been given to the Committee, but I shall not comment on the evidence until the Committee has reported. The points which I make are from my own knowledge of the nuclear power industry. I hope that hon. Members will agree with what I say. No doubt this matter will be debated fully when what has been described as the short-term energy crisis is over.
The Central Electricity Generating Board said this morning that it will order nine nuclear stations, beginning with two in 1974 which will be for commissioning in the 1980s. This is a very big nuclear programme. It involves 18 reactors, two of which will be the high temperature reactor lead stations. The CEGB proposes that 16 of the reactors should be of the American light water design and manufactured under licence in the United Kingdom through the Westinghouse Corporation. I know that this is of interest to many hon. Members on both sides.
The South of Scotland Electricity Board has told us that it will have to follow suit in what the CEGB does and order eight reactors of less capacity. The CEGB wants to order two reactors for each station of 1,200 to 1,300 megawatts each. However, there is no such size as 1,300 megawatts at present in operation in the United States. There is no operating experience of a 1,300 megawatt reactor, and to undertake this as a crash programme would be totally impractical. No one knows which components will have to be re-designed but


some, especially the pressure vessels, must be imported.
Since August the CEGB—which last year said it needed no increase in nuclear capacity for the present—has committed itself to this large programme involving water reactors which are entirely new to British industry. I make no criticism of the Government over this matter. They have not yet made a decision. I hope that they do not make any such decision which the CEGB and others now wish them to make.
The ordering rate for nuclear stations in this country has been overtaken by Germany, France, Japan and even Spain.
Nevertheless, the charts which were given to the Select Committee this morning show a huge expansion in nuclear energy in the United Kingdom by the year 2,000. The CEGB has told us that by then nearly 50 per cent.—or over 100 million tons of coal equivalent—would be nuclear power. We have never heard this proposal before. This is a far bigger amount than has ever been previously suggested.

Mr. Dalyell: The hon. Gentleman has made an important and new statement of policy. He said as an aside that the South of Scotland Electricity Board had stated that it had to follow the CEGB. I declare an interest, in that it affects my constituency, as there is a proposal to have precisely such a power station in Bo'ness in West Lothian. Can the hon. Gentleman say where that assertion is made? It affects not only policy but many people in my area.

Mr. Neave: I thank the hon. Gentleman for that intervention. The chairman-designate, Mr. Tombs, said in evidence at a public session of the Select Committee last Thursday that in his ordering policy he would have to follow what the CEGB wanted. He does not want to order light water reactors. He would prefer to order British technology, but as his is a relatively small organisation he has to follow the CEGB.
The other comparison to put before the House is expenditure on research and development on reactors through the Atomic Energy Authority. That expenditure is much smaller than in many other industrial countries. We spend about

£52 million a year on reactor research and development, although over the years the cumulative expenditure has been £500 million. The United States spends 10 times as much, and Germany four times as much, and other countries give launching aid.

Sir Harmar Nicholls: Is the order for the 16 American reactors out of the 18 being placed because the Americans are the only people who can give delivery or because we are not prepared to put in a bid to make a British contribution on that scale?

Mr. Neave: I am coming to that point.
The reasons the CEGB gives for this very big order, for 16 light water reactors of American design, is that they are proven because a large number have been ordered abroad. Indeed, nearly 200 have been ordered. But that argument ignores some fundamental difficulties, which must be taken into account to avert a rash decision, and before British technology is abandoned. I will give four reasons.
First, although the advanced gas-cooled reactors have suffered serious delays, they could still turn up trumps. That happened with the Magnox reactors in the 1960s. The delays to the AGRs at present are no greater than those to American light water reactors under construction in America now, although the CEGB does not seem to realise that. There are 30 nuclear stations running late in the United States. A great deal of damage would be done to British research and development and technology, and time and costs would not necessarily be saved. Therefore, I do not believe that a crash programme is desirable or that an "off-the-shelf" programme is anything more than an illusion.
Secondly, no one has any operating experience of the size of reactor, 1,300 MW, which the CEGB proposes to order. That point must be made strongly when the House debates the matter. I hope that my right hon. Friend the Secretary of State will publish a Green Paper showing the advice he has been receiving from the Nuclear Power Advisory Board on these issues.
Thirdly, the idea that the United Kingdom will derive export benefit is absolute nonsense. We should not be able to compete against our own licensor,


the Westinghouse Corporation, in markets where it is firmly entrenched. How could there be any export potential for light water reactors manufactured here under licence in markets where Westinghouse has the whole market anyway? It is a great pity we did not develop our own design of heavy water reactor when it could have had an export potential.
The fourth and final point is safety. The American philosophy is that a brittle fracture of the thick steel pressure vessel is "incredible". I put the word "incredible" inside quotation marks because that philosophy has been discredited, even in the United States. Unless the Nuclear Inspectorate in the United Kingdom agrees with that philosophy, it will not grant a licence, and light water reactors could not be installed in this country. What would the CEGB do then? It would have to look at existing British designs.

Mr. Dalyell: To a sedentary interruption by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) during the Prime Minister's speech, the Prime Minister snapped back that there was no decision on the buying of American light water reactors. As the Secretary of State for Trade and Industry is here, it would be greatly to the advantage of British industry if he intervened to clear up precisely what the Prime Minister meant in that rather snappy interchange with my right hon. Friend.

Mr. Neave: I do not know whether my right hon. Friend wishes to intervene in my speech. But it is fair to him to say that he has told us several times that he has not made the decision yet. I am making this speech, and my colleagues on both sides of the House are making similar points, in order that my right hon. Friend should know what we feel, because it will be a crucial decision for British industry. I make no apology for raising the matter in this debate, which is, after all, about the energy of the future.
There is a growing demand for additional safety features in the reactors. All that seems to mean that the light water reactors which the CEGB wishes to order will have to be redesigned with

new drawings and probably additional costs.
Therefore, there is no need to allow the CEGB or any other organisation to strike this blow at the prestige of British research and development. I have already declared my interest in the AEA through Harwell. I hope that my right hon. Friend will consider seriously directing the CEGB that it should order reactors based on British technology and should abandon the false idea that the national interest demands American know-how and technology.

6.38 p.m.

Mr. Michael McGuire: I think that you said earlier that 80 hon. Members wanted to take part in the debate, Mr. Speaker, so I promise to be brief.
Having listened to the exchanges between the Prime Minister and my right hon. Friend the Leader of the Opposition, and in particular to the words of the right hon. Member for Wolverhampton, South-West (Mr. Powell), I am reminded of a little jingle which goes something like this:
Let opinions be discreet
In view of what may follow them
Keep your words both soft and sweet
In case you have to swallow them.
The Prime Minister certainly had to swallow the words about a statutory prices and incomes policy which he used to throw across to us when we were in the Government.
I have seen Governments strangle themselves by an exposition of the economic situation, such as we gave in the freeze of 1966 and then the promise in a Budget speech to introduce statutory price controls. As an ordinary backbencher, I have traipsed through the Lobbies defending Government policies, which I could do only generally or out of sheer party loyalty.
I think that the Labour Government came to the knowledge, belated perhaps, that a prices and incomes policy can be carried out on a once-and-for-all basis, on the basis of a freeze for a short period. After that one must rely on a social exhortation programme, in which the Government of the day show they are meeting the needs of all sections of the community. It is within that framework that when trade unionists and


employers meet they will have due regard to the national interest.
Miners' MPs in the past have spent many hours debating these matters until late at night and often early in the morning. They have warned the Government—and this included the Labour Government—of some of the follies perpetrated in their energy and prices and incomes policies. Slightly to rephrase an old Lancashire saying, "A striking child gets the most milk"—in other words, those who make the most clamour get the bigger share of the cake. The next Labour Government will face this dilemma and they will have to ask themselves "How shall we meet that challenge?" We have constantly warned the Government of the folly of the lack of an energy plan, and all that has happened is that the miners have had a few crumbs from the table. I see the Under-Secretary of State looking a little quizzically at that statement. He brought in the Coal Industry Bill last year because he was forced by events to do so and for no other reason.
I want to deal at a little greater length with the reasons why the miners in the period from 1958 did not flex their industrial muscles. It could be said that they did not do so because they did not have the economic power to do so. The miners were told, "If you go for a large increase, more pits will be closed". The Wilber-force inquiry examined the logic and justice of the miners' case and it must be said that the miners have tried to remedy the imbalances in the wage structure of the mining industry. The members of the Wilberforce inquiry were astonished at the way the miners had arranged these matters. On the matter of holiday payments and in the distribution of the wages cake the NUM allocated the larger percentage to their lower-paid colleagues. They were practising what they preached, and they certainly did not flex their industrial muscles. With the wonderful constitution under which the miners operate they have not had a strike, and this must be borne in mind.
People now say that the miners are being unpatriotic and have not at heart the national interest. From 1945 to 1958 the miners could have held the country to ransom, because we were then 90 per cent. dependent on coal, and at an earlier

stage our dependence was even greater. However, gradually the pendulum swung away from the use of coal, and now electricity generation takes up 70 per cent. of our coal production.
I should like to quote something once said by Arthur Horner. I say, in passing, that people often say how many Communist members sit on the NUM national executive, and they assume that this is a Reds-under-the-bed plot. Some of these comments are often taken out of context. They are matters which, perhaps, on other occasions I could debate at greater length. It is true that we have had Communist leadership. Curiously enough, the miners have always had a Communist general secretary, since 1945. Lawrence Daly is not one, but we had one until Daly came along. Arthur Horner, who was the epitome of this kind of Communist leadership, used to say to the miners, "You can demand the moon, but let us not destroy the temple of nationalisation. Nationalisation has more to offer us in the long run than destructive industrial action. We shall get our rewards in due course."
The miners achieved a much prized objective in 1947, when they signed a five-day week agreement. In the nation's interest the miners voluntarily used to work six days a week—and they did that until they were no longer required. They did that work from a sense of patriotism. They then found that their wages were slipping. The Wilberforce Report points out that miners once earned wages 25 per cent. above average industrial earnings. However, miners saw their position slip to sixteenth in the league table.
We have had put before us today the proposition, "Who runs the country? Can we allow sections of workers as powerful as the miners—as well led as the miners, with all their history of help to the country—to hold the country to ransom?" What we should be asking ourselves is, "Do we need coal and shall we need more coal in the national interest, from the point of view of national security and national economics, in the years to come?" The final question that must be answered is, "Who shall we get to dig this coal?"
At my surgeries I see men who have now left the pits. I also see ambulance


men. These workers tell me about their difficulties, and express their dislike of the ban on co-operation. I do not know how Conservative Members who have not been involved in industrial disputes—people who are not members of proper trade unions—can really understand these matters. Within the psyche of every trade unionist there is, curiously enough, a feeling of guilt. They do not want to be put in that position. When I have spoken to ambulance men and other trade unionists and asked what they feel about the miners' claim they have replied, "Our claim is just, but we feel that the miners' claim is infinitely just."
I have spoken to ex-miners—indeed, some of them have become ambulance men—who have told me that they would not return to the pits for £50, £60, £70 or even £80 a week. This is why we have a crisis, involving a net loss of 14,000 men in the pits in the past nine or ten months. We must do everything we can to retain the men who are already working in the coal industry.
The question to which we should be addressing our minds is whether the miners' claim is likely to bankrupt the nation. The answer is that of course it will not bankrupt the nation. The Government have become so entangled in legislation which is found to be unworkable, involving a freeze, and all the rest of it, and phases one after the other, that they have reached the Maginot Line, beyond which they state they will not retreat.

Mr. Daniel Awdry: The hon. Member for Ince (Mr. McGuire) knows a great deal about the miners. Will he tell the House whether he thinks it will be a good idea to give the miners the opportunity to vote on these matters, in the form of a ballot?

Mr. McGuire: I shall take a moment or two to explain the miners' constitution. The constitution involves lodge and branch committee meetings as a first stage. Those meetings then send delegates to an area conference and then on to a national conference. On the question of a ban on overtime, the national conference decided overwhelmingly to back the national executive in its decision. Everybody agrees that in that respect the miners did not break any law. Indeed, if any Conservative Member

wishes to tell me in what respects the miners have broken any law, I shall give way to him. I do not think it can be said that by not working excessive hours to obtain a reasonable wage the miners are breaking the law.
One of the greatest casualties of the present Government was that of arbitration. They set out to destroy it, and destroy it they did. I must remind the Government that it was Wilberforce—one can dress it up in all kinds of euphemistic terms—and arbitration that solved the dispute. There is enough wit and wisdom, particularly with the new Secretary of State for Employment, following his successful travels in Northern Ireland, to be charged with this task. Given a free hand, the right hon. Gentleman could bring this matter to a solution. Not a great deal is required, if one can read the signs. When one listens to people on television one realises that there is not a lot between them.
The right hon. Gentleman has a quality, a personality and a charm—and these qualities are important in this situation—to bring about an atmosphere of conciliation. He has the great gift of making one feel comfortable even on the scaffold. He would make the poor chap on the scaffold think that it was in his own best interests and would kindly ensure that the knot was in the right position.
I believe that the Government and the Prime Minister should get away from this Maginot Line feeling. One of my hon. Friends, in a debate a couple of weeks ago, said that it was a great shame that the Government once again had to take on the Brigade of Guards. There is no doubt about it, there is something in the miners' history and in their personality which commands respect. They are not getting a colossal wage, by modern standards. I do not know anybody who would rush to go down the pit even if the increase were met in full. There will have to be a better deal for the miners.
Look at what they have got after nationalisation for nearly 26 years—a pension of £3 a week when they finish, and not very good sickness or injury benefit schemes. We should all be amazed at the moderation of their demands. Theirs is a just claim. I repeat; there is enough wit and wisdom


to solve the issue. If the Government will get away from this confrontation—this "Who rules the country?" attitude—they will find a ready response from the miners, and we can then get back to a situation in which we can attract men to that industry, which is bound to grow as our need for coal grows.
I believe that the Government can demonstrate their interest in wanting a bigger mining industry by implementing projects such as the Drax coal-fired power station to further develop this country's coalfields and thus produce a breed of happy and contented miners.

6.53 p.m.

Mr. Timothy Sainsbury: I thank you, Mr. Speaker, for calling me to speak for the first time on this occasion. Before turning to the subject of the debate, I should like to pay a tribute to my predecessor. I never had the good fortune to know Martin Maddan, but I have heard much about him, both in the constituency and from hon. Members. From all I have heard, I now know that he showed in his life and in his work in the constituency his Christian belief in service to one's neighbours. He also served the cause of Europe well, particularly by his office as Joint-Treasurer of the European Movement.
It is a tradition of these occasions to avoid controversy. I believe that it was an hon. Member of Irish birth who said this placed him in an impossible position and his speech would, therefore, be extremely brief. This is also a debate in which it is difficult to avoid controversy. I trust that hon. Members will grant me the usual courtesy if I do occasionally stray across the bounds of what might be considered controversial or non-controversial. I hope that analysis and description may be admitted as being non-controversial, and I shall try to confine myself to those activities.
I find that I am the first Member to be elected for the first time by the borough constituency of Hove. It is, therefore, appropriate that I should say a few words in description of my constituency, which comprises the borough of Hove and the urban district of Portslade, shortly to be united as the district of Hove.
Recent events have caused a lot to be written and said about my constituency,

and I shall do no more than say that Portslade is by far the older of the two communities, being mentioned in the Domesday Book, whereas the fame and the very existence of Hove dates from the nineteenth century. My constituency does not contain any mines, heavy industry or major shopping or office centres. It is mainly residential, with some light industry, a few shops and some offices. It is bounded by the Channel in the south and the Downs in the north. But these are physical characteristics and are not the important part of any description of the place, for that must be about the people who live there.
The 1971 census shows a population of 91,222. Of that population 30,686, or nearly exactly one in three, were over the age of 60. By national standards of persons per room, Hove households are not crowded. Some 12,726, or exactly one-third of all the households, are single-person households. Therefore, there are many elderly people in my constituency and a large proportion of them live alone. Numerous voices more eloquent than mine have on many occasions described the difficulties and the problems of the elderly, and especially the elderly living alone. The House does not need me to remind it why they do not find it easy to keep warm, to stand in queues or to contend with rapidly rising prices. I am, however, sure that hon. Members will understand why, when I speak today, I have the needs of the elderly particularly in mind.
There would seem to be general agreement that the immediate situation is difficult, that the future is uncertain, that some reduction in our level of prosperity is in the short term inevitable and that there is a current problem not of insufficient demand but rather of inadequate output. These are the lowest common denominators of current economic analysis, but on this occasion it is perhaps wiser for me to say no more on the immediate situation but rather to consider the longer-term economic objectives.
I remain an unrepentant believer in the merits of growth. It is difficult enough in times of increasing prosperity to ensure that a generous share of that increase is given to the retired. If the economy stagnates, there is a grave risk that the spending power and the pensions will really decline. Therefore, I believe that it is right,


even at this moment, to give thought, as the Prime Minister did, to the longer-term objective, which is to continue to increase the country's prosperity. For this reason I welcome the action that my right hon. Friend the Chancellor of the Exchequer has taken to control consumer credit. It will have an immediate effect, and, equally, the controls can, when the situation allows, be quickly dismantled. They have an immediate and direct effect on demand and also on the demand for imports.
I regret, however, that measures have not been taken in respect of interest on bank overdrafts. Bearing in mind that longer-term objective, it must surely be of the highest priority to ensure that sufficient credit is available for productive investment. The disallowing for taxation of interest on overdrafts could ensure that bank credit is used to the greatest advantage, and it would also be fairer as between different classes of taxpayer.
I also welcome the measures it is proposed should be included in the 1974 Finance Bill to tax development gains and unrealised capital gains of property development companies—and I refer to property development companies because, as my right hon. Friend pointed out, property speculators are treated differently and far more severely.
These measures will bring the taxation treatment of property development on to a more equitable basis in relation to the taxation treatment of other economic activities while avoiding the trap which many hon. Members opposite fall into of discouraging development. It is worth remembering that the increase in value of existing commercial property, whether occupied or not, arises from the demand for that type of property in relation to supply. If the property increases in value very sharply, that in itself is evidence that the supply of that type of property is inadequate to meet the demand.
The right way to reduce the rise in property values, and indeed, perhaps, as has happened in New York, to obtain an absolute reduction in property values in some areas, is to increase the supply of the relevant type of property. In this connection, I hope that my right hon. and learned Friend the Secretary of State for the Environment will give further consideration

to introducing measures, in addition to those included in the Local Government Act, for ensuring that, at a time when necessarily the supply of new buildings will be reduced, property, particularly residential property, is not unreasonably kept out of use.
Again bearing in mind the longer-term objective of increasing the prosperity of the country, I welcome the decision not to increase direct personal taxation. An increase in this area would be slow-acting, not easily or quickly reversed. But, above all, it would be a disincentive to effort. Hard work and the sort of economic activity which can create prosperity for all would be discouraged by increases in direct personal taxation, and it is, after all, the efforts of those who are economically active which must pay for both the young and the elderly.
I hope that it may not be considered controversial to suggest that the prosperity of the society in which each of us lives is part of our own individual prosperity. To that extent, to be unselfish is in our own self-interest. At this difficult moment in our affairs, to look beyond our immediate self-interest is to help not just our country but also, and especially, our senior citizens. We all learn as children that we cannot always have everything that we want and that give and take is a necessary part of life. It is the elderly who suffer most if we forget this lesson and ignore the mutual interdependence that is essential to the well-being of any society.
At this time, there is talk of survival. "Survival" is not really the appropriate word in the context of maintaining this or that level of economic activity. But it is survival, not economic but personal, which is the daily concern of many of my constituents. That is why I would like on this occasion to ask those who are seeking for themselves a larger share of the wealth of the nation to give thought to the needs of our senior citizens.
There are many who believe quite sincerely that they have a claim for special treatment. The claim of the elderly to such treatment is very strong indeed. At a time of crisis, we should first ensure that they are not made worse off in relation to other groups and that they have no extra burdens and difficulties to bear.
Yet if the present claims for special treatment were to be met, inevitably the elderly would be worse off, and that is why I say that the cost to the community of meeting those claims is far too high. We must continue to search for ways by which our economic life can be regulated so that those who are not strong enough to join in the fight are not the first to suffer, while at the same time ensuring that, when external circumstances allow, we can once again continue to increase our national prosperity so that all sections of the community can benefit.

7.6 p.m.

Mr. Patrick Gordon Walker: I am glad to be the first to congratulate the hon. Member for Hove (Mr. Sains-bury) on his maiden speech. I admired his fluency and apparent confidence, which I think grew as he went along. He managed to make a most impressive speech. I liked the sympathy with which he described the people of his constituency, particularly the elderly. I think that when he broadened his appeal to the plight of all elderly and retired people, he got the support certainly of all the Opposition and also of many hon. Members opposite.
I was very interested, as was the House, in the hon. Gentleman's discussion of long-term policies. Some of them were a trifle controversial, but the hon. Gentleman spoke with such cogency and modesty that no one minded at all. Having heard him, we all hope to hear him again before too long, speaking unshackled by fear of transgressing the line of controversy, because I am sure that when he really lets himself go he will make extremely powerful speeches.
The hon. Gentleman said dutifully that he welcomed the Chancellor's measures I must say that he picked out the two 0r three better parts of those measures. But it seems to me that the main thing which the Chancellor did in his autumn Budget was really only to clear up part of the unholy mess he made in his main Budget earlier this year. Up to only a week ago, the right hon. Gentleman was strutting about as proud as a peacock about reducing taxation and getting growth. He did do those things, but he achieved them by taking the easy option of launching a consumption boom by the simple and fatal

device of huge expenditure unaccompanied by taxation.
All that the right hon. Gentleman has done is to take back part of the deficit which he himself created so lightheartedly. It has not really been properly noticed that he is taking back only part of the deficit. The outstanding deficit that he has left himself with will still go on, stoking up inflation. The right hon. Gentleman took some credit for cutting public expenditure rather than putting the burden on individuals, but to reduce public expenditure does affect individuals; it does put burdens on them. He made a false distinction. He will be directly responsible for cuts in the building of schools, hospitals, old people's homes and universities. He will be responsible for cuts in social welfare projects. All these latest cuts must be added to the previous cuts announced not so long ago.
The direct consequences of the Chancellor's exuberant multiplication of the money supply are still with us. The main consequence is a catastrophic worsening of the balance of payments. In his statement yesterday, he did very little, if anything, to deal with this critical and central problem. He did try earlier to act against the effects of his policies upon the balance of payments by floating the pound, but this only made matters worse, because the devaluation of the pound led to a great increase in the cost of imports. We have to pay much more for our imports than do other countries with sounder currencies.
The Government, therefore, are not right to say that the turning of the terms of trade against us is wholly out of their control. It is in part, but it has been aggravated by the extreme devaluation of the pound putting up the cost of imports. The rise of imports costs further stoke up inflation. So grave were inflation and the balance of payments crisis that these alone were enough to compel the Chancellor of the Exchequer to make his statement yesterday.
The Prime Minister, who never in his life has admitted to an error or, indeed, to responsibility for anything that has gone wrong in this period in which almost everything has gone wrong, has found yet another scapegoat—the industrial action by miners, train drivers and power supervisors. If the Prime Minister is


right in his diagnosis, his obstinate determination to confront the trade unions is insensate. By his own admission, a slight degree of flexibilty in incomes policy would remove this central cause of all our problems—as he sees it—and immediately solve the short-run problem which we face.
I totally disagree with the Prime Minister's argument that this would lead at once to an enormous all-round increase in wages. Even if some consequential wage increases followed from a little flexibility in stage 3, it would not mean abandoning the incomes policy. The Prime Minister is fighting the last battle in the war, as do all generals. He has not realised what is possible in the present circumstances. Our basic problem is not wage increases but inflation, and that, I am afraid, will be with us for a long time yet.
The Chancellor of the Exchequer has taken some new measures to combat inflation—much too late and still too little. The only way to counter inflation is to use all possible means of attacking it together, each one backing up the other, and not to rely primarily upon an incomes policy as the Government have done for so long. We need much stronger fiscal measures, more vigorous direction of credit, and a policy of social fairness and control of prices. Realistic steps of this kind to reduce inflation would check undue wage increases and buttress an incomes policy. We want a vigorous attack on inflation, plus what might be called a stage 3½ policy—not an abandonment of an incomes policy but a relaxation of it in these new circumstances. In any case, in the totally new situation that has arisen the cost of some wage increases would be far less than the price we are paying now, and we should be able to get back to a poilcy of economic growth.
As grave as the challenge of inflation is the mounting despondency and cynicism of public opinion. The Chancellor yesterday missed a great chance. His statement fell far below the measure of what was needed and expected. It was largely irrelevant to our main needs—the balance of payments, in particular. He will, I fear, not succeed in rallying the country. His statement will not give our people the necessary inspiration to brace themselves to face the long haul that still lies ahead of us.

7.15 p.m.

Mr. Edward du Cann: I join with the right hon. Member for Leyton (Mr. Gordon Walker), for whose opinions and intellect we all on both sides of the House have the greatest respect, in paying tribute to my hon. Friend the Member for Hove (Mr. Sainsbury) for what everyone agrees was an admirable speech. I am not sure whether the right hon. Member for Leyton and I are entirely joined in welcoming the fact of this Budget—the second, I believe, of 1973. I warmly welcome it, above all because it was needed. There, I think, the right hon. Gentleman will totally agree with me.
The economy had without doubt become overheated—the evidence has been consistent and strong. That alone is the principal reason for our balance of payments problems. The need for this Budget was urgent, for the deficit, after taking into account invisibles, would have exhausted the whole of our reserves in one year's time. In addition, in various ways we have incurred a debt of no less than £900 million. Borrowing is all very well in helping the balance of payments temporarily, but in the end all borrowings have to be paid for. I therefore repeat that I warmly welcome this timely Budget.
After many years in public life I increasingly reflect that the only certainty in politics is uncertainty. In the context of this country's economy and the world scene, uncertainty as to how matters will turn out for us and for the world is inevitable. For example, who knows by how much in 1974 or subsequently the Arab nations may reduce our oil supply or that of any other country? All that we can be sure of is that it will be reduced. Who knows by how much the volume of world trade may contract as a result? This may appear to be an extreme situation, but when it first occurs, before one has learnt to live with it and to deal with it, it gives rise to certain stresses.
By way of example, to drive on the M4 from London to Bristol, or to voyage across the Atlantic in a ship, with the steering wheel in a locked position would be obviously absurd. Frequent corrections of course are necessary during any long journey. Equally, the presentation of a Budget in March or April of each


year may be a great parliamentary occasion, but it is about as relevant to the nation's affairs and to the regular process of economic management as the annual general meeting of a company is relevant to the running of its vast business. In any voyage, in the management of any enterprise, management must be a continuous affair, and as a rule—I hope that I carry the right hon. Member for Leyton with me, as I fancy I may from what he said—the need for violent or substantial corrections of course can usually be avoided if smaller changes are made in good time.
Perhaps this year the Chancellor's huge cuts in public expenditure will give a greater importance to an occasion which the House has hitherto taken much too lightly, namely, the debate on the Expenditure White Paper and, following that, the work of the Expenditure Committee.
What matters then is that my right hon. Friend and his colleagues should now publicly acknowledge that they are ready to bring before the House in January or February additional proposals—indeed, a fresh set of proposals, if need be. Apart from the general justification that in an uncertain situation one must always be ready to take action, I have one particular reason for making this suggestion, to which I will return.
I come now to the Chancellor's strategy, the relevance of the Budget, and its likely effectiveness. The Leader of the Opposition put it entirely correctly when he said that our problems are both short term and long term, and that the two are quite different. Our short-term problems, broadly speaking, are entirely of our own making. They will pass. Indeed, they must pass, in the interests of us all.
I am sure that the House is broadly united in its anxiety to discover a solution to the present industrial unrest. The right hon. Member for Leyton implied that it will cause hardship. That is true. Worse, it is unhappily divisive of the nation, and it is inefficient. It means that we are not making the best of ourselves. It renders us less well equipped to withstand blows from beyond our shores than we could or should be.
To that end, the Budget, as other hon. Members have said, gives little overt help except in a negative sense. I thought

it right that there should be no general increase in income tax or any indirect taxes. I thought it right—and I believe that we can give my right hon. Friend the Chancellor of the Exchequer great credit for this—that there should be no discouragement of what is referred to generally as international trade. In no way can his actions upset our trading partners. It is essential that nothing should be done in any way to set a bad or a restrictive example to the flow of international trade.
I admit that I was surprised—this bears on a point made by my hon. Friend the Member for Abingdon (Mr. Neave)—that the Budget contained no discouragement of the use of various fuels. The need for the most stringent economy is paramount.
I admit to being disappointed on two counts. The judgment of the Chancellor may well be right. My right hon. Friend may be right and I may be wrong. But I speak as I find. I was disappointed that the highest-paid in our society—the most successful and the most senior managers of businesses—are to be singled out for especially heavy taxation. What is the sense of that? In the United States they do not penalise their senior management. They do not do so in Japan, Germany or France. Why should we do it in the United Kingdom?
I am reminded of the occasion when Voltaire visited the United Kingdom to find Admiral Byng about to be executed. On inquiring the reason for his execution, he was told that it was because Admiral Byng had failed to engage the enemy more closely. Voltaire replied, "Pour encourager les autres". There is little encouragement for senior management if especially heavy taxation is imposed.
I now take up a point made by my hon. Friend the Member for Hove. There may be a social reason for imposing taxation on property developers, but in truth—and whatever the reality may be about speculation and this is a subject about which there is great misunderstanding—it is a fact that we need more and not less property development. I hope that, in general, both sides of the House will unite to encourage sensible and wise development.
My second disappointment is that, at the other end of the scale, in the light of experience of the next few months the Chancellor may need to give extra help


to the needy. I hope that he will keep his options open to enable him to do so. If he feels that the cause of national unity would be enhanced, that is another reason for flexibility—another reason for not regarding a Budget as an extraordinary occasion. It is another reason for saying that we should have Budgets introduced by Chancellors whenever they think it necessary.
I now turn to the long-term situation, to which the right hon. Member for Leyton was especially adverting. Our most significant long-term problem is not only the potential oil shortage but the likely increase in cost. It may be that some of the figures which we have seen quoted, which have shown price increases of five or six times, are exceptional. I doubt whether increases of two or three times are so exceptional.
I cannot think from where the Arab nations have taken the example of demanding more money for less supply, or the retention of an asset in an inflationary period as being a valuable course of action.
There are two remedies open to any British Government. The first and the most urgent is to reinforce the balance of payments. It must be right to curtail demand at home, and to do so sharply. Thereby we shall encourage exports. As my right hon. Friend the Prime Minister so rightly pointed out, the export prospects for British industry are currently brilliant and should remain so irrespective of the level of world trade. They should remain so, at any rate, while the £ sterling remains substantially undervalued.
Exporting may or may not be fun. I take the view that in the main it is extremely hard work, and often sacrificial. However, it cannot be any less attractive to export at present while home-earned profits suffer a consistent squeeze—and sometimes an unfair squeeze—and while the opportunity for increased profitability exists in overseas markets.
The cut in public expenditure, as the right hon. Member for Leyton so rightly said, is substantial. In so far as it means the cancellation or postponement of favourite projects I regret it deeply, as will my constituents. However, if we have no growth henceforth we must learn the lesson that we cannot spend what

we do not possess. It we have learnt that, that surely will be a good reason for celebrating this Christmas.
If, too, we learn the need for economies in various aspects of Government expenditure, that will be thoroughly desirable. I doubt whether any right hon. or hon. Member—and I note that my hon. Friend the Member for Bridgwater (Mr. Tom King) is present—is not aware of individual instances of a profligate waste of taxpayers' money. My hon Friend and I, for example, have watched the patching up of old hospital buildings in our part of the world instead of the provision of a new hospital building, which could have been done years ago, thereby saving a great deal of money.
I applaud the long overdue ending of the fantastic expansion of domestic credit. It has diverted goods from export markets to home supply. Without question, it has been a powerful inflationary force. It seems that all the Chancellor's actions must help exports and reduce the import potential. They should do so promptly. So far so good.
The other remedy which is open to a British Chancellor is less capable of ready definition. If peace is indivisible, as was once suggested, it is all the more true that the British economy cannot be isolated from the world scene. I reflect that we often find it easier to be preoccupied with our own affairs and forget too much of what is going on in the outside world. I have no doubt, as my right hon. Friend the Prime Minister said, that our best strength is in international negotiation—in dealing, for example, with the oil problem. The oil-consuming nations should use their strength to the maximum of their ability. If that point is taken account of, and if the Prime Minister has been busy discussing it on behalf of us all in Copenhagen, that is all to the good.
I say in all seriousness that never in my adult life have there been world economic and monetary affairs of such disorder as at present. Never have I known such potential chaos. For example, there is the indiscipline of the exchanges. We have no agreed system for international monetary movements, that is for foreign exchange. There is an absurdly wasteful international competition in interest rates. There is the careless manufacture of international credit on a vast scale, which for some of the developing


countries is again potentially a disaster situation. As the next years go by we shall become increasingly conscious of the potentially disruptive effect of the enormously large earnings of the oil-producing countries upon the exchanges, for which the Euro-dollar surpluses were an easy trailer of experience, so to speak. I could continue, but I give only one more example. We have the abominable poverty of the majority of the world's population, about which Mr. McNamara spoke so movingly at this year's meeting of the World Bank and the International Monetary Fund in Nairobi. They exist side by side with the, until now, growing affluence of the remainder.
Each is a subject in itself. Collectively and in the aggregate they are a recipe for disaster on a grand scale. I suggest that there is an urgent need for international agreement upon each and all of them. I say, again, that the United Kingdom does not exist in a vacuum. I believe that we shall never achieve that peace of mind, that stability and that security for which our people long, until solutions are better attempted for these vast problems that is the apparent case today. I do not believe that either the House or my right hon. Friend the Chancellor of the Exchequer can afford to pay only secondary attention to these affairs.
While we, as a nation, are profligate—as we have been—or careless in the management of our own affairs—as we have been—we cannot exert any influence on the world scene. If yesterday marked the end of that long, unwise chapter in our national history, I rejoice. We have such great opportunities. Given the will, we can achieve the financial leadership of Europe. It could be ours for the taking. I was very glad to hear my right hon. Friend the Prime Minister say that growth remains our long-term objective.
So little is yet done. There is so much yet to do. We can argue for it only on the basis that we manage our own affairs better than we have done hitherto. I am sure that the House is eager to begin this work.

7.32 p.m.

Mr. Alex Eadie: I do not propose to pursue the arguments of the right hon. Member for Taunton (Mr. du Cann). I am prepared to predict

that at some time in the future he will find it necessary to go to the confessional to amend some of his views about the great advantages that Europe will be to the British people, because no one really believes that any longer.

Mr. du Cann: That is not what I said. It is not a view that I have ever taken. The view that I was expressing was that we can offer Europe leadership and that I should like to see that done. That is very different.

Mr. Eadie: I do not propose to argue with the right hon. Gentleman. I say merely that there was a longing and a hope in his speech that we would resume the leadership of Europe, and I was attempting to say that I was prepared to predict that the right hon. Gentleman would find it necessary to go to the confessional about Europe because no one really believes any longer the great advantages which will derive from Europe. This is a matter that the British people will decide for themselves.
I have observed since the crisis began, and even in the Prime Minister's speech on television, a great many references to "the national interest". If Government supporters disagree with everything else that I say, I hope that they will concede that Opposition Members also speak with the national interest at heart. I hope, too, that Government supporters will concede that the national interest is not the private possession of the Conservative Party or of the right hon. Gentleman who happens to be the Prime Minister. It is about time that this Government realised that Parliament is given to them only for three or four years and that it does not belong exclusively to any political party. It belongs to the people. If we can agree about that, we can go on sensibly to discuss some of the problems before us.
There will have to be a great deal of bridge building. I believe that last night's television broadcast by the Chancellor of the Exchequer was a scandal and a disgrace. His implications about the mineworkers will not help bring peace and tranquillity and do away with confrontation. The right hon. Gentleman drew an analogy with the Japanese. I can assure him that when that gets home to the miners it will cause a great deal of bitterness. When it comes to


patriotism and being concerned about this country, the miners have buried their dead in peace and war. We shall not take lightly analogies of that kind from the Chancellor of the Exchequer, the Prime Minister or any other member of the Tory Party.

Mr. Patrick Cormack: While I endorse everything that the hon. Gentleman has just said, may I point out to him that the fact that my right hon. Friend the Chancellor of the Exchequer used a certain form of words does not mean that he was comparing the miners with the Japanese.

Mr. Eadie: I suggest that the hon. Member for Cannock (Mr. Cormack) allows the Chancellor of the Exchequer to defend himself. He was given an opportunity to do so today. I am trying to be as restrained as possible. I am saying that a great many bridges require to be built and that we require a change in relation to confrontation. This nation needs coal, and, as my hon. Friend the Member for Ince (Mr. McGuire) pointed out, in the end it will be a matter of who digs the coal.
We have heard today of the mantle of responsibility being shoved on to the shoulders of the new Secretary of State for Employment. It is a burden which no ordinary man can carry. No one can achieve any solution to our current problems without the necessary power and authority to do so. I listened to the exchange between my right hon. Friend the Leader of the Opposition and the Prime Minister about what was necessary to achieve a settlement with the miners. Can this House be inspired by the knowledge that the Prime Minister intends to give the Secretary of State for Employment the authority to reach a settlement. Is the right hon. Gentleman prepared to give the Secretary of State authority to make sure that the industrial dispute with the miners is finished?
I ask that question because two hours ago I was chairing a meeting of the Power and Steel Group. We were discussing the kind of energy policy which Britain needs. If Government supporters are interested in Britain having an energy policy, I recommend them to read the proposals of the TUC on the subject. They were published back in June, but they make it very clear that the trade

union movement is thinking about the national interest.
Two of the people present at that meeting were the President and the General Secretary of the National Union of Mineworkers. I say that bridges need to be built and that authority must be given to the Secretary of State because they told me that the Secretary of State has invited them to meet him on Wednesday and Thursday. If we are to get out of the present industrial difficulties, our attempts will not be helped by the Chancellor of the Exchequer insulting the miners on television or by the Prime Minister conveying to the miners in an exchange in this House with my right hon. Friend the Leader of the Opposition that there "ain't gonna be" any movement, that we have reached an impasse, with the Government adopting a Maginot Line attitude, and that we must have this continual conflict. It is in the interests of both the nation and the miners that a settlement be reached. The miners are working a five-day week. They do not like being involved in this conflict. Throughout history miners have tried to carry out the responsibilities that have been thrust upon them. They have now realised their importance.
The right hon. Member for Taunton spoke for his people. I speak for the miners. I do not believe that I shall have to defend the miners because they are likely to be paying surtax in future. The miners' settlement will not put them in the surtax range. If hon. Gentlemen opposite believe that what the miners are asking for is so attractive, they should persuade people to get jobs in the mines because coal faces are standing empty. Indeed, I am beginning to realise and appreciate the skill that I have. Some of us could train those hon. Gentlemen who are so enthusiastic about the tremendous wages that the miners are to get. It is in the interests of both the nation and the miners that a settlement be made.
The miners are concerned not just about coal but about our energy policy. I was pleased that the right hon. Member for Wolverhampton, South-West (Mr. Powell) mentioned nuclear power and energy. The whole House will have to discuss this subject at some time and make what will be a tremendous decision.
A week last Thursday I was asked as Chairman of the Power and Steel Group to go to Windrush and see the reactor. The Government always seem to give the impression that we must consider the national interest. With my hon. Friends the Members for South Ayrshire (Mr. Sillars) and West Lothian (Mr. Dalyell), I spent a whole day at Windrush studying and examining what is happening about the third generation nuclear reactor. We have spent between £20 million and £40 million developing a prototype of the heavy water reactor. I have discussed this matter with technologists of whom any country would be proud. I understand that the reactor has been generating electricity for eight years and that it is perfectly safe. The American reactor, to which reference has been made, is in a cylinder. If anything goes wrong one cannot get into it. But with our reactor, developed by our brains, if anything goes wrong it is possible to walk in and take out the core. It is completely safe.
I understand that Finland and Australia nearly bought it. Indeed, the Hydro-Electric Board in Scotland nearly bought it. However, the nigger in the woodpile was the CEGB. I do not know why we listen to the Chairman of the CEGB because he has been proved wrong so many times. The board's credibility has been absolutely destroyed on matters connected with decisions affecting the nation's energy.
We have heard rumours that the Government may decide to buy reactors off the shelf from America. If so, it will be one of the biggest betrayals technologically in our history. It will be a wiping out of British technological expertise and, in some aspects, a severe blow to the prestige of British technology.
I am not waving the flag. My hon. Friend the Member for Ince and I tried to warn the House of Commons some time ago that the more we depended for sources of energy on other countries the more serious would be the predicament in which we should find ourselves if something went wrong. At times I made speeches at 7 and 8 o'clock in the morning warning the House that if we became over-dependent on oil we would be in trouble. But no one would listen.

I think that the House should listen to the miners' representatives in this situation. The House should take heed of what we were trying to point out in the past not only about coal but about nuclear energy. If we depend on other countries for nuclear power expertise, it will be a betrayal of the British people. It will mean that at some time in the future we shall suffer very severely because we shall not have the necessary expertise.
In 1970 we were told that we were getting a businessman's Government. It certainly is a businessman's Government. All the members of the Government are associated with business. It is no great credit to the businessman's Government that we have been governed with a greater degree of incompetence than at any time in our history.
I understand that it will cost about £400,000 or £500,000 a week to settle the miners' claim. That is taking the highest figure. Yet we are prepared to sacrifice about £400 million production a day in order not to breach stage 3. This is a businessman's Government.
Last week I met and discussed the situation with Sir Eric Drake. He said that the current price of oil was about $16 a barrel. Compared with that, coal is dirt cheap.
The House must take cognisance of the $16 a barrel aspect. It means that every source of indigenous energy is in. In my constituency and that of my hon. Friend the Member for West Lothian we have shale mining. We know what happened about that. We went into EFTA, we could not pay the subsidy, and that collapsed. We used to work out the figures and say that we could not work shale because it would cost $4 or $5 a barrel to produce oil. As an indigenous source of energy, businessmen must surely appreciate that shale mining is now in.
In the past I have referred to producing oil from coal. I was ridiculed when I mentioned it. Those who referred to that matter were treated as eccentrics. We were told that it would cost $9, $10 or $11 a barrel to produce oil from coal. We have to think about this now. An oil-from-coal installation is a possibility on the basis of present knowledge. I understand that this week, $17 and $18


a barrel has been paid for oil. The previous figure I gave was paid last week. We have plenty of coal but not plenty of miners. We have cheap coal but we shall not get cheap miners; we shall have to pay for the miners.
To some extent, this is a phoney crisis, created by the Government. They want to frighten the electorate with the threat of a General Election. One thing that they will have to do before going to the country, if it is in January or February, is to draw up an energy policy and realise that coal will need to play a major part in it. We cannot get coal without miners. If this is businessmen's government, sensible, government, when the Secretary of State for Employment meets the miners on Thursday he should have the power and the authority of his Government to make a settlement with them in the interests of the nation.

7.51 p.m.

Mr. Harold Gurden: I am grateful to my hon. Friends and to some members of the Labour Party for the analyses that we have heard, especially in the two Front Bench speeches. They have been nearly exhaustive but no doubt there are more valuable contributions to come.
I certainly share the views of my right hon. Friend the Member for Taunton (Mr. du Cann) expressed in his closely reasoned speech. I want to deal with only one aspect of this matter. We must all recognise that the basis of the Government's problem is inflation, relating to their responsibilities and, no less, the responsibilities of the trade unions. It has been obvious to many people for the last 20 or 25 years that this kind of confrontation had to come. If the nation is to survive, there must be some accounting for what goes on in unions.
The "I'm all right, Jack" attitude which was clearly stated by the miners' leaders, as we have all heard on television—more wages and more pensions, lower prices and lower profits—makes nonsense. What is taken out in wages in almost any business—mining or anything else—leaves little to play with, and certainly not enough to give what the trade unions demand of this Government or any other.
I want to examine the situation of trade unions, because I believe, from talking to workers in my constituency,

that they are prisoners of the trade union system. They are controlled by a few leaders with a nineteenth-century mentality on trade union policy. This is preserved closely by the Left-wing militants in the unions, and it is carefully designed to bring about Communism. Some of the so-called responsible union leaders themselves do not deny that they are Communists, and they want to defeat the ballot-box system in this country and every other democratic country.
Listening to Mr. Gormley, I thought that he, too, was a prisoner of the Left wing in the unions. Indeed, it has been said that they wish to defeat phase 3, to defeat the Industrial Relations Act and to defeat this democratically-elected Government—which, of course, in the end would mean that they wanted a dictatorship. When that has been achieved, I suppose that Mr. Gormley would have to change sides, when the dictatorship had been thrust upon him. If he did not conform to that Government, I suppose that he would be sent along to one of these mental hospitals in the company of some of the Jews on the other side of the Iron Curtain. However all this may be, the Reds that were supposed to be under the bed are now out and truly exposed.
My experience in business taught me that trade unions needed to be much stronger and not weaker and that this is most important for the workers themselves. I believe that the unions have to be modernised. I have talked to union leaders in Birmingham about this. If we are to get out of our difficulties, the day must come when trade unions employ their own economic experts to advise them so that they can sit at a table with the employers and say "Let us look at the balance sheet and judge the size of the cake; let us see what all the factors are. Let us see that the profits are preserved for investment in the business in which we earn a living and which pays our pensions. Let us safeguard the selling price of our product, so that it is competitive."
We have heard already that coal, which used to supply 90 per cent. and more of our energy needs, now supplies only 70 per cent. Even that 70 per cent. will decline if the miners continue their pressure. Only after the unions have sat


down with the employers and really examined the business and the figures, advised by their own experts, can they decide what wage demands would be sensible. That would be preferable to the present system of putting any old figure on the table, saying "That is what we will settle for and nothing less," and following it up with a strike.
If we are to remain a democratic country, the trade union system must be completely reorganised. The good will is there, and such a strengthening of the system is essential. It has to be modernised. It must be brought to the situation which we shall face in 1974, in which the trade unions understand the size of the matter and how much pressure business will bear in wage demands. Only then will they be able to assess the true demands which are consistent with the interests of their members and, indeed, society itself.

Mr. Arthur Lewis: The hon. Member is explaining about understanding economics, balance sheets, and so on. I assume that he will agree that there are experts on both Front Benches. The hon. Gentleman supports a Government who are refusing the miners a wage of up to £40 a week, but last week the Government announced that they will pay £10 per day, free of tax, to local councillors. I do not decry councillors. If a miner is a councillor he can obtain £50 a week, tax free, by not going into the pits. But the same Government refuse to give him £50 a week for working in the pits. I ask the hon. Gentleman: "What would you do, Chum?"

Mr. Gurden: We have all been much entertained by the hon. Gentleman. Very few people believe that we are talking about the sort of demands that the miners wish to make. We are talking about what has been said repeatedly, about what follows paying the miners their £10 million, £20 million, £30 million or £40 million more in wage demands, and the inflation in this country. If it were merely a question of settling for what the miners wanted and if we had guarantees against any leapfrogging wage demands——

Mr. Arthur Lewis: Give them £10 a day.

Mr. Gurden: —from other industries, there would be little more to worry about.

But I am concerned about whether the trade unions realise what real wages are and what are realistic demands in the light of the economy of the business in which they work. Until that day comes we shall get no further with the problem of inflation.

8.2 p.m.

Mr. John Morris: I hope that the hon. Member for Birmingham, Selly Oak (Mr. Gurden) will forgive me for not following his remarks. He saw Reds under every bed. He seems to have forgotten the distinguished part played in the mining industry by Will Paynter and Arthur Horner in periods of great difficulty.
The hon. Member for Abingdon (Mr. Neave) and my hon. Friend the Member for Midlothian (Mr. Eadie) drew the attention of the House to the crash nuclear programme which was canvassed. It is many years since, for a short period, I was in the Ministry of Power. I saw then the great promises made regarding nuclear energy. Unfortunately, in the event, many of those promises were not fulfilled, in respect of delivery, cost or coming on stream. It would be highly regrettable if decisions were taken to buy on the scale envisaged and to introduce foreign goods on this scale and we sacrificed—in the same way as we sacrificed coal for oil—long-term considerations on the altar of short-term requirements, particularly if it meant the increased involvement of foreign sources for energy. All the sums of the past will have to be done again. I am sure that the House will agree that before any decision is taken the whole issue should be canvassed fully and debated in the House.
The only fair comment that we had from the Chancellor in his speech yesterday was his answer that if the present industrial troubles were settled there would be no immediate change in his proposals. I ventured to suggest to him—it was this that elicited that important answer—that he would not change his proposals by one comma. That was the agreement that he gave, as I understood it. That is a lesson which we must remember throughout the debate.
The Chancellor has made an admission regarding the significance and the basis of his proposals. However deeply one feels, one way or the other, and however


deeply one is inconvenienced by the action of the miners, the power engineers or the engine drivers, it is abundantly clear and follows logically from the Chancellor's admission that they are not the authors of this country's misfortunes today. These are, rather, a combination of Government policy and Arab blackmail. It is regrettable that the alibi of industrial trouble remains and that it has been blown up to the scale that it has. The impression has been created that it is one of the real causes of the Chancellor's actions. With his statement yesterday, the right hon. Gentleman has removed at a stroke the whole of that alibi, and there remains only the tragedy of the oil situation.
The truth of the matter—the right hon. Member for Taunton (Mr. du Cann) came a great deal of the way in this direction—is that a new budgetary proposal, such as we had yesterday, was badly needed months ago. The ship of State has been steered so close to the rocks that anxiety must have been rising in the heart of every right-thinking person, who must have wondered how soon remedial action was to be taken. A crisis was coming upon us long before the Arab action, which only worsened it and made it significantly more important. But even if that were not there, some action would have had to be taken to remedy the inflation with which we are all faced.
Has the Chancellor taken the right action? Has he been able to deal with both the long-term issues and the short-term problems? What must be clear to all of us now is that there is a deep awareness growing throughout the world, particularly among the primary producers themselves, that primary producers have a new bargaining power at their command. One cannot turn back the clock in that respect. Today it is the oil producer; tomorrow it may well be—I think it is already—phosphate producers. Each of the primary producers in turn will be flexing his muscles and telling the Western industrial world of the new power that is at his command. It is at our peril that we forget the lesson that the oil producers have so speedily learned, in terms of the phosphate producers and all other producers, who will be able to get together. Indeed, we in the Western world must realise that never again, perhaps,

shall we be able to get our raw materials on the cheap and build our prosperity upon that basis.
We live in an unfair world, in which the rich industrial West has battened for so long upon cheap primary production. We live in an unfair country. Here one sees a free-for-all. In the same way that primary producers are beginning to flex their muscles, combinations of people are beginning to realise their real strength. One example is what the miners are doing today. They are realising their strength. They have had that strength for many a long year, but the combination of world events has resulted in a great and growing awareness of that strength and a great increase in it. Tomorrow it may be those who look after our sewage works or our waterworks. Essential and vital producers and providers of services, each in turn paralleling world action, will be realising the strength at their command.
The new term that has been manufactured is "social contract", and my understanding of it is that instead of the jungle of the free-for-all, with each in turn flexing his muscles—be it within this country or without this country—there must be a consciousness of fair play on the part of all producers, workers and consumers if there is to be any restraint and order in our affairs.
It is against the background of that situation that I ask my next question. Has the Chancellor of the Exchequer begun to build the essential new framework that is so badly needed if we are to avoid a repetition of our current situation? Regrettably, he started with the inheritance of Selsdon Park. Regrettably, he has presided over the financial affairs of the most divisive Government in history. This is a Government who have sought to turn the clock back, who time after time have failed, and been forced to do yet another U-turn. Indeed, a historian looking back at the number of turns that they have had to make will be unable to distinguish between the Government and Hampton Court Maze or "Sphaghetti Junction".
Against the background of the present situation the country was geared to sacrifices. The situation had become so serious and black that it demanded sacrifices right across the board. But what was revealed to this House yesterday by the Chancellor


was what I regard as a wholly irrelevant set of proposals. First, let us look at the vital subject of fuel. The least one could have expected was that the Chancellor would face the reality of the fuel situation. We might have expected some charge—some imposition or restriction on the unlimited use of the motor car, or some bias in favour of public transport in order to ensure a saving of vital fuel. Instead of that, the private motorist is able to use his motor car in any part of the country, provided he does not exceed 50 mph. My constituency contains a steelworks, employing 14,000 people, and at the beginning of January it will be working a three-day week. That shows the irrelevance of the approach when giant industries are short of fuel but private users are able to carry on regardless of what is happening.
I am talking about the industrial life-blood of our nation. Major sacrifices will be demanded from our workpeople. We have seen the chicken-feed approach of the Chancellor to surtax payers, property developers, and so on. Those who will be making the great sacrifices are those who will be working not five days a week but three days a week, and receiving only three days' pay for their efforts. If they have been finding it difficult to meet the cost of rents, food, and so on, on five days' pay, how will they be able to survive on three days' pay in the new year?

Mr. Nicholas Ridley: I am a little puzzled—perhaps the right hon. and learned Member will explain—how saving petrol by restricting private motoring would help to provide coal to keep the steelworks in his constituency going, and to provide electricity which, again, is scarce because of the shortage of coal?

Mr. Morris: I do not intend to exhaust the House with a whole series of illustrations about the varied forms of energy, of petroleum and petroleum products. I am merely seeking to indicate by a fairly simple example that while there is no intervention at all as regards one use of fuel, there is a major intervention—be it in respect of coal or fuel oil—which will result in industry throughout the land working for three days as opposed to five days a week. Having

served in the same Ministry as the hon. Gentleman himself, I am not totally ignorant about the use of different fuels. I am seeking to illustrate the complete absence of sacrifice from one section of the community and an enormous sacrifice from another. The people who will particularly suffer are the pensioners and those on fixed incomes, and I should like some clarification about the consultations which are to take place on the price of coal and electricity. Those are matters which will affect everyone throughout the land who has found it so difficult to manage and will find it even more difficult in the future.
We shall see a great cut-down in the production of steel. Here I declare my interest, as the representative of an important steel constituency. A cut of 40 per cent. or 50 per cent. will have a galloping effect upon all those who consume the steel that we produce. If the effect is catastrophic in a steel-producing area, how much greater—given the shortage of steel of various kinds in the last few months and the enormous dependence of the North Sea oil exploration on steel and steel products—will be the catastrophic effect in consuming areas? This blanket intervention by the Government will undoubtedly have an enormous effect upon industry throughout the land, and there will be even greater bottlenecks in future.
We are concerned about the development plans for steel. Approximately £400 million is to be invested in the steelworks in my constituency, but I now understand that a total of £70 million may well be cut off from the total national investment of the British Steel Corporation this year. We want to know where that cut will fall and whether it will affect our expansion plans. In the past, we have had booms accompanied by balance of payments difficulties, and many of those difficulties have been caused by the steel imports which we have had to make because the steel industry was unable to cope with our demands. We should really be eating the seed corn if we did not carry out our plans to improve the steel industry and provide the necessary investment.
Another matter which was raised yesterday was the safeguarding of the regions, and Wales and Scotland. I fully appreciate that the road programme must


play its part in whatever proposals are put forward by the Government, but I enter one point of speical pleading and say that the completion of the M4 is of vital significance to Wales if employment is to be provided in the years ahead, because our handicap is that as a great producing centre our communications with other parts of the country are much worse than theirs. It is not a question of all parts of the country having to suffer in the same way. Wales, Scotland and the regions are far from the consuming centres and will suffer that much more unless same kind of balance is achieved in terms of the sacrifices that are made. I hope that by the end of the debate we shall have some clarification about the M4.
Instead of giving us the right policies—policies in which the burden falls on the broadest backs—the Chancellor has launched an attack on public expenditure. The test whether our society is fair or not is how much we are able to commit to public expenditure, even at the expense of personal incomes. It is the easist way we know, short of imposing Draconian penalties to redistribute wealth.
I reject completely the Chancellor's approach of a swingeing cut in public expenditure. I well understand why the Government have taken this line. By so doing they can avoid personal unpopularity. It is a cowardly approach, because they do not have to face the income tax payer; they have simply called for chicken-feed contributions from the surtax payer. They have avoided facing the beer drinker and the petrol user. It is more convenient for them to do that, because it delays the effect of the measures and fragments the unpopularity. It means that schools, roads and hospitals will be hit, but only the local communities will be affected and will complain, and they can be picked off one by one. It will be the local councillors and the local Members of Parliament who will have to bear the unpopularity many months ahead—and probably after a General Election. I can understand the philosophy behind the Government's policy. The time will come when the country will realise, if the date of the election is delayed, just what this brake on public expenditure really means.
I come finally to stage 3. Everyone in the country now accepts that it is clearly outdated. It was conceived before the present energy crisis. I hope that there will be a sensible outcome over the miners' dispute. The right hon. Member for Wolverhampton, South-West (Mr. Powell) made it abundantly clear—and I endorse what he said—that the miners have not broken the law. There is a code, and there is an enjoinment to observe the code, but in the final outcome there are residual powers which the Government can take to protect the needs of the nation.
It should not be said that the miners at any time have broken any law. If this code is regarded as sacrosanct, the law is an ass, and something has to be done about it. I hope, at the end of the day, that an understanding will be reached, in a new situation, which will be the least expensive to the nation. Our nation cannot afford a continuation of the present misery with most of the work force on a three-day week. Whatever happens over this dispute, at the end of stage 3 someone will have to work out a figure that will ensure that we have sufficient miners to dig the coal. That is a cardinal requirement for this country in the new situation, and we ignore that fact at our peril. To ignore it is to act, as I fear the Government are acting, like Gadarene swine.

8.25 p.m.

Sir Gilbert Longden: The right hon. and learned Member for Aberavon (Mr. John Morris) is the first person I have heard to complain that the Government's proposals are cowardly. Everyone else seems to agree that they are severe and likely to be unpopular. However, I agree with him that between us we must evolve a fairer way of arranging our affairs. I agree with him, too, that we are not likely to get the raw materials that we need except at a very much higher price than we have had to pay hitherto. However, as both sides of the House are constantly paying what I hope is more than lip-service to the need for helping the developing nations, there is only one way we can do that and that is by paying them more for


what they produce, and we shall have to face that.
The nation has had a shock, and I hope that that will have had a therapeutic effect. I hope that the average citizen will learn to economise on inessentials and will learn the ancient British virtue of self-reliance as a result. The Prime Minister made it clear again today that our present situation has come about solely because the Government are striving to save the nation from one of the most disastrous evils that can afflict a people and because some members of the more powerful trade unions are determined to prevent the Government from saving the nation from that evil. That evil is inflation.
The simplest citizen by now should understand what this economist's term means. It means that the pound in our pocket buys less and less as the days go by. Its immediate effect is to hit the poorest hardest, and in the long term—and perhaps the not-so-long term—it hits us all. It can reduce a currency to nothing, and it can destroy any democratic form of Government. We have seen it happen elsewhere, and we have long known that it could happen here. I believe that it would have happened here if the Government had not acted when they did.
My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) decries the effect on inflation of wage increases. He grudgingly admitted today that it might have a minimal effect, but the great cause in his opinion is money supply.

Mr. Powell: That is what the Chancellor says.

Sir Gilbert Longden: I did not hear my right hon. Friend say that. Of course, it has an effect on inflation, but I believe that inflation results when people demand to be paid more than their combined productivity justifies. The Government made most strenuous efforts to persuade employers and unions to agree to a sensible way of arranging our affairs. The simple recipe of my right hon. Friend the Member for Wolverhampton, South-West was tried ad infinitum and failed. Never before in our history have a Government taken more time and trouble to consult both

sides of industry. The Government failed, so a statutory policy became necessary.

Mr. Powell: That failed.

Sir Gilbert Longden: That policy has not yet failed. Had it not been for the most unfortunate coincidence of prices in world commodities rising by between 70 and 80 per cent. in one year alone stages 1 and 2 could have been much more effective. No one can laugh this off. When stage 3 came along the militants struck. As my right hon Friend the Member for Wolverhampton, South-West said, our more serious wounds are self-inflicted.
If stage 3 is jettisoned, except to be replaced by lower permitted increases, inflation will run riot again. I fully accept the view that if we had to contend only with a shortage of more expensive oil we could get by. The Leader of the Opposition admitted this afternoon that we could almost be back to normal, subject to any deficiencies there might be in our oil supplies. We are back to where we were before stage 1, and all the Leader of the Opposition has to offer are cures for the effects of inflation. He offers no cures for the cause.
The miners are not breaking the law. I do not know of anyone who suggested that they are. [Interruption.] Whoever suggested that the miners are breaking the law is, in my opinion, wrong. The miners are not in conflict with Parliament. They are in conflict with their fellow citizens. In January 1973 there was an article by Paul Johnson in the New Statesman in which he said, about the unions:
They have placed short-term material advantage above every other consideration, and in doing so have lost the substance as well as the shadow. … Thus we have seen groups of workers heedlessly destroying the livelihood of their fellows, operating as it were a brotherhood of Cain. … We have seen unions using their massive collective strength to trample the rights of the individual.
That was written by a well-known Socialist journalist. The gist of the article is 100 per cent. anti-capitalist and Socialist.

Mr. Arthur Lewis: How much did he get for that article?

Sir Gilbert Longden: The hon. Gentleman had better ask him.

The Deputy Speaker (Sir Robert Grant-Ferris): The hon. Member for West


Ham, North (Mr. Arthur Lewis) knows how I loathe sedentary interjections.

Sir Gilbert Longden: I am obliged for your help, Mr. Deputy Speaker, but the hon. Gentleman can go on talking like that until the cows come home for all I care.
That article was written less than a year ago, just before stage 1. That is the situation to which we are now returning. I said that I disagreed with the right hon. and learned Member for Aberavon that the statement by the Chancellor of the Exchequer yesterday was not a step forward on the road to a fairer society. I believe that it was.
I am glad that at long last the Government have done something about the great fortunes made by property speculators. [Interruption.] I am not being wise after the event. I have preached this for many years. I am talking about property speculators, not about developers. I am very pleased that I am giving my right hon. Friend the Member for Wolverhampton, South-West such cause for laughter. There is a difference between speculation and developing. I am talking of property speculators. I have talked about them for many years, including the time when my right hon. Friend was in the Cabinet yet did nothing about the matter.
The opinion which I have long expressed about this matter—in vain, I fear—is better expressed by Bernard Levin in an article in The Times. He wrote:
It is clear that our present Government have not the slightest idea of the damage done overnight to our society's chances of survival … by their casual abandonment of their promise to do something about the profits of the property speculators.
I said after the 1964 General Election, and I still believe, that we lost that election for that reason.

Mr. Ridley: Surely, the man who buys at the bottom of the market in property prevents the price going even lower, and the man who sells at the top of the market prevents it going even higher? The activities of the property speculators are designed to stabilise fluctuations in the price of property. Why should my hon. Friend want to stop that?

Sir Gilbert Longden: If my hon. Friend can make the public believe that, he can

make them believe anything. He deserve-to be returned at election after election.
Now something has been done. I am sorry that it is not a great deal more. I do not suggest that it makes much difference one way or the other to the economy, any more than will the 10 per cent. surcharge on surtax. The point is that the methods of making money through property speculation are socially unconscionable. It is a question of psychology. One does not have to be a Socialist, who is naturally envious of anyone better off than himself, to be offended by such profits. They illustrate an unacceptable face of capitalism.
Of course, there is such a face. What economic system has not got an unacceptable face? There is one whose face we should find much less acceptable than the face of capitalism. Has not the time come when more effort should be made to warn the moderate trade unionists, who so vastly outnumber the militants, what the face of Communism as practised in the Soviet Union is like? After all, there is no dearth of information about what the life of the ordinary man and woman in Russia is like.

Mr. George Machin: They have to work five days a week.

Sir Gilbert Longden: Much authentic information pours across the Iron Curtain every week. Is that the kind of life we want here? There is a small but highly organised number within our gates whose object it is to establish just such a system here. They are not only militant trade unionists but are to be found among stage and film producers and among employees of the mass media.
Sir Arthur Bryant tells us in one of his books that the rulers of Rome, by the policies they pursued on the eve of the Dark Ages,
turned active and self-respecting citizens into inert and selfish ones; and made the moral shell which protected society so soft that it could protect it no longer.
The undoubted fact that only a tiny minority is dedicated to anarchy does not justify our pretending that they do not exist. We know what one rotten apple can do to the others in a barrel, and we should know that there are scattered throughout our society teachers, trade union leaders and, above all, purveyors of entertainment and exploiters of the


mass media whose dedicated purpose it is to corrupt the nation and especially its youth. We have the word of the Italian Communists, who make no secret of it. They say:
Our aim is to defend an enterprise which is free from the restrictions of ordinary moral rules. The producers and actors are in effect like ants working for us voluntarily and without pay, as they eat at the very roots of our society. Why should we stop them at their work?
What is all this in aid of? As I have said, hardly a week passes without authentic news of what life in Russia is like. Need we be ignorant of it? Do we want to be confined in a spiritual and physical straitjacket, with one false step leading to the asylum or the camp? If not, we must do much more than we are doing to defend ourselves from it. As my right hon. Friend the Prime Minister said to-day, it is time the moderates spoke up, stood up and allowed themselves to be counted.
Meanwhile, it is true that our society is in need of reformation. As I am by nature rather idle, I always take the words of others if they precisely sum up what I wish to say, because it saves me from formulating them myself. It so happens that in The Times this morning there is a letter from one of my old friends, a sometime Member of this House, Sir David Llewellyn, and I wish to quote it in conclusion:
There is wide agreement that the whole structure of our society needs to be examined in order to see how it could be made fairer. A Royal Commission, chosen to this end, would not by itself heal the wounds from which our country is bleeding. But if it were to examine job evalution in relation not only to wages but to salaries, dividends, the distribution of wealth, inheritance and social benefits, it could have the same influence as the Beveridge Report in pointing the way to a kinder and fairer society. There is no doubt that glaring injustices and conspicuous expenditure make the smooth working of an incomes policy, under Governments of Left and Right, difficult if not impossible, except by fits and starts. Those of us who believe in 'the middle way' could do worse than to recall a speech made by Stanley Baldwin "—
which he then quotes. He goes on:
A Royal Commission, for the purpose of seeking more equitable foundations upon which statesmen could build, might help towards a truce of God"—
which Stanley Baldwin asked for—
and so prevent a repetition of the tragedy of 1926—and worse.
This is what I myself would hope.

8.42 p.m.

Mr. Eric S. Heffer: The hon. Member for Hertfordshire, South-West (Sir Gilbert Longden), like some other Conservative Members, and also the Prime Minister, seems to think that the problems we have in the economy have nothing whatsoever to do with the Government, that they are all a great plot on the part of some Communists, anarchists, Socialists of one kind or another, or wicked trade unionists—and, worst of all, I suppose, Joe Gormley, represented as a dreadful militant—all intent on bringing the country to its knees and to ruin. Those hon. Members who speak in those terms know that this is not true. They know, as the Prime Minister knows, that they are lying—or, rather, let me say, making untruthful statements—to the general public.
What they are happy about is the fact that at this point in time the deep economic crisis which their policies have, not entirely, but largely, brought about has been masked by a number of industrial disputes which they have seized upon to deflect the people's attention away from the policies themselves. I should imagine that they are very happy that those disputes are taking place at the moment.
Listening to the Prime Minister this afternoon, I could not but assume that he was making not a serious statement to the nation to deal with the actual problems but a semi-electoral speech, leaving his options open, since he may feel that it might be a good thing to go to the country on the basis of bashing the unions.
I put this point to hon. Members on both sides of the House, and it is a serious point. Suppose the Government did go to the country, and suppose that their wildest dreams came true and they won a great and overwhelming electoral victory. Suppose that then the miners, the day after the election, continued—not to go on strike, because they are not striking—to work five days a week, a 40-hour week, as they are doing at the moment. What would the Government then do about the miners? Would they say to the country "Overtime must now be made compulsory. We will make it the law of the land and the law of the land must be obeyed because Parliament has so decided. This must be the situation in the future"?
In a free democratic society when a group of workers is involved in an industrial dispute, both sides cannot for too long adopt a rigid position—and the Maginot Line has been referred to. The parties must get round the table and make a compromise agreement. Unfortunately, the Prime Minister keeps making statements which give the clear impression that he does not want a compromise agreement. He keeps taking the line "This has been decided by Parliament". Parliament can sometimes be wrong, and it was wrong on a previous occasion in regard to prices and incomes policy. Some of us then warned that it would lead to situations where we would not get out of difficulty and where there would be trouble with the unions. The Tory Government have made even worse errors in this respect than did the Labour Government.
Conservative Members will have to decide whether they accept the democratic compromise between labour and capital, for in this case the Government stand fully behind capital. They can either have a compromise situation or go one step further and bring in more Draconian laws. They will then begin to talk in terms of a new trade union structure—of a "modernised" trade union movement. We have had some hint of this idea from the Conservative benches today. No doubt that modernised trade union movement would have representatives appointed by the Government of the day, as occurs in Spain and in many other countries. That is the logic of that situation. I do not think Conservative Members—this certainly applies to the majority of them—want that situation. We certainly do not want it.
It is about time Conservative Members said to their right hon. Friend the Prime Minister "You must get into this world. Do not live in a world of your own." They must tell him that he must not become a Walter Mitty character after three or so years in office. He must cope with the real world and not just live in an enclosed world in rooms in this Palace and at No. 10 Downing Street.
They must also tell the Prime Minister that it is time he and his colleagues became flexible on industrial matters. All they are doing at the present is forcing the miners into a position where sooner

or later they will stop work altogether. They will not tolerate this sort of abuse much longer. They will not go on being attacked day in and day out as though they are the people who are responsible for the country's economic ills. They will not stand it, and they have a right not to stand it.
I put it to the hon. Members who were arguing about a week ago that we ought to have a ballot that, in the sort of climate that has been created, if the miners held a ballot their answer would be very clear indeed—a full-blown strike. Then where would we get to?
Of course, the Government could dash for an election. Perhaps that is what they have in mind. Perhaps they think they will gain a great deal out of this situation and will be able to appeal to the people to say that Lawrence Daly, Joe Gormley, Jack Jones or Hugh Scanlon do not run the country but that it has got to be the elected Parliamentarians and the Prime Minister.

Sir Gilbert Longden: Could the hon. Member tell the House what the Government could do after such an election that they cannot do now?

Mr. Heffer: I have made precisely that point and I can only assume that the hon. Member for Hertfordshire, South-West was not listening. If the Government believe that when the people go into the polling booths they will be voting for the Prime Minister, Jack Jones or Hugh Scanlon, I want to tell them that that is not how they will be voting. If the Government believe that they are going to be able to appeal to the people by saying, "As far as we are concerned you are voting for law and order against these wicked miners and other sections of workers because it is a question of who runs the country", then the people will say that it is at least clear that this Government do not run the country. They will say, "This Government have got us into such a goddam awful economic mess that the quicker we have a change the better." I do not much mind if the Government dash for an election in January, February or March.

Mr. Dykes: I should like to go from the hon. Gentleman's hypothetical suggestion to the immediate situation in


order to get out of this mess—and I sympathise with much of what he said about the miners. Would the hon. Member support the idea of accepting the existing National Coal Board offer now for a more fundamental review of their position in the energy context from the end of January?

Mr. Heffer: As I said in the House the other day, there was one thing, and one thing only, in the Prime Minister's statement which had a certain amount of wisdom—that one should not negotiate trade union matters across the Floor of the House of Commons. I have no authority to speak on behalf of the NUM. Some of my colleagues who are in the NUM and some who are associated with the executive possibly have that authority, but I have not and it is not right for anyone to say across the Floor of the House what the miners will or will not settle for. That is totally wrong.
I agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell), who has argued so many times that these discussions should be left to the people who are, or should be, involved in such discussions—the trade union leaders and the employers. These are the people who determine what exactly will come out of such discussions and what the agreement should be. We are in this difficult position precisely because of Government interference in trade union matters and trade union negotiations. Surely, that is the one great lesson that we should have learned by now.
The Government have returned to the position of Selsdon Man. Once again we are seeing their class character being brought out in a positive way. Mr. Peregrine Worsthorne—who is a perceptive writer, although I do not agree with his political views—said in the Sunday Telegraph this week that the Government were not really talking about the national interest but were concerned with class politics. That, indeed, is what it is all about. It is class politics; it is confrontation. If it were not class politics, we should have had a very different statement from the Chancellor.
The Chancellor is taking £80 million from the total yield of the so-called property speculators. What does that amount to? Nothing. Everyone knows that it

means very little to them. It is, as my hon. Friends have said, chicken-feed. The truth is that once again the main burden will be placed in various forms on the ordinary working people. That is what cuts in public expenditure really mean.
The right hon. Member for Wolverhampton, South-West is a very honest man. All of us will acknowledge that, even though we detest many of his views, certainly on issues like race, colour and economics, which are totally wrong. But, being honest, he said that cuts in public expenditure will mean a growth in unemployment. They will indeed. It is no good the Government trying to dodge their responsibilities.
For example, the building and construction industry will almost immediately throw people out of work. In addition, the regions will be affected in a bad way. All this will be on top of the three-day week which the Government are prepared to foist upon our people rather than settle with the miners and the other workers involved in industrial disputes.
The class character of the Government comes out clearly already with the application of social security cuts and the abolition of the three waiting days. When workers are thrown out of work for two days out of the five, they will lose three days' unemployment benefit entirely. That measure was deliberately introduced by the Government as an adjunct to the Industrial Relations Act. The Government have now returned to the class policies they were pursuing in their first year of office.
I say to the Government that they should test out their policies on the public if that is what they want. But I tell them now that the public will understand very clearly, first, who have brought the country into this economic situation, and, secondly, that the Government are pursuing a policy directed against ordinary working-class people, and will give the answer in the ballot box and ensure that this disastrous Government are defeated.

9.0 p.m.

Mr. Anthony Wedgwood Benn: My first task is to congratulate the hon. Member for Hove (Mr. Sainsbury) on his maiden speech, which was commented upon favourably by several hon. Members. He concentrated


on the problems of the elderly and to that extent will have had the ear of hon. Members.
All the speakers in the debate have agreed with the Chancellor at least on one point, in that he admitted for the first time that this country faces the gravest crisis we have had since the war. We are not agreed about the nature of that crisis or its cause, and we are certainly not agreed about the measures that the Government propose. Even if there were not an election atmosphere—which there is—it would be our task in this debate to try to clarify the choices that will have to be made sooner or later when these issues go beyond the Chamber and are resolved, as they must be, in the ballot box.
The Government's case is a simple one. It is that the economic crisis justifies their measures, that the oil crisis has complicated the situation, that industrial disputes have made necessary the measures announced by the Prime Minister, and that the whole nation should now, in duty bound, support the Government. That is a gross over-simplification. The economic crisis, which the Chancellor for the first time admits to exist, did not begin with the oil crisis. There was a massive and growing balance of payments deficit, raging inflation and real poverty among millions of our people. What the Prime Minister was able until recently to dismiss as the 'problems of success' were for many of our people problems of real difficulty that can no longer be neglected.
During this period many of us uttered warnings about what was happening in the overall economic situation, but right up to the last minute the Secretary of State for Trade and Industry pretended that none of these problems existed. He never used his power and authority to warn the nation of what he must have known better than most lay just round the corner. That is the extent of his failure of trust. On the oil crisis, the right hon. Gentleman is the energy supremo. I often read in the newspapers that we need an energy supremo, but I remind the House, as did the Prime Minister this afternoon, that the prime responsibility for the energy situation rests upon the Secretary of State. If, day after day, he reads in the newspapers a demand for an energy supremo, he may

well reflect upon what we think he has been doing throughout this developing situation.
The problems of oil supply did not begin with the Middle Eastern war. Anyone who has, even superficially, followed events throughout the summer knows that the likelihood of some cut-back in Arab supplies was evident some months ago.
The main emphasis of the Prime Minister's speech was that the industrial disputes made it necessary for him to introduce the measures that he introduced on Thursday—that what is really at stake is stage 3, and that every decent, honourable, patriotic citizen who believes in a prices and incomes policy must support stage 3.
If the Guardian is to be believed, the Prime Minister warned his colleagues in Copenhagen that Communist elements among the miners and the power engineers were at the root of Britain's problems. If the right hon. Gentleman really believes that the only difficulties he faces derive from the fact that some trade union leaders are members of the Communist Party, it confirms my suspicion that he has not the faintest idea of what is going on.
In the past three-and-a-half years the present Government have done more damage to the fabric of our society than the Communist Party has done in the 50 years of its existence. It is open to the Cabinet at any time it chooses to use the powers which it has taken to test its own theory by putting a ballot to the members of the trade unions to see if they are prepared to reject their leaders in favour of the Government's view. Of course, it has not done so. The Government know in their heart that the trade union leaders speak as best they can for the interests of their members.
In my opinion the three-day week has received less attention than should have been the case. From the point of view of our people it will the first consequence—and a devastating consequence—of the Government's policy. It will create massive cuts in living standards. The Chancellor announced yesterday that there would be no increase in direct taxation. Let the people calculate what the three-day week will mean to them and their wage packets. Let them remember


that it may continue for some time. It is a decision that makes no economic sense. If we accept Professor Kaldor's calculation of £400 million cost to national output a week, it will certainly involve a grave dislocation of output and exports. It will be accompanied by a 50 per cent. cut in steel output. It was done without consultation with either the CBI or the TUC.
Therein lies the explanation for the three-day week. It was done as a political measure, in an attempt to pitch the British public against the miners in the present disputes. It is no good Conservative Members pretending otherwise. The Prime Minister proved it today when he said that the three-day week will continue while the ban on overtime continues. It will continue if there is enough coal at the power stations. It will continue regardless of the coal stock position. It is a political decision, introduced by the Prime Minister. There was no consultation.
The coal stock figures, which are available to those who study them, suggest that 20 million tons of distributed stocks were available at the power stations on 1st November, that 9 million tons are burned each month, and that 5 million tons are now being delivered each month. There is a 4 million ton shortfall which, allowing for a reduction in electricity use, would be enough to go through to March or April. I challenge the Minister to publish all the figures about the distributed coal stocks at power stations, and about the deliveries and the delays, so that the trade union movement and the industrial leaders can assess whether these Draconian measures are necessary.
It is my belief that this is deliberate psychological warfare, designed to bring pressure to bear upon the miners in their present situation.
In answer to a question from my right hon. and learned Friend the Member for Aberavon (Mr. John Morris), the Chancellor of the Exchequer said that his measures had nothing to do with the disputes. The omissions from the Chancellor's statement are interesting. There is nothing about food subsidies, rents or mortgages. There will be an increase in coal and electricity charges. The significant feature of the Chancellor's statement is that when, without reference

to stage 3, it was open to the Government to make a conciliatory move to the trade union movement on issues which had been raised with it by the TUC since the beginning of stage 1, in September 1972, the Chancellor declined to make a movement in the direction of the TUC. That confirms my suspicion that the Government are trying to escape from their difficulties by heightening the confrontation. I do not believe that the new Secretary of State for Employment will be able to produce an answer by the exercise of personal talents, such as they may be, without regard to the policy which he will have to follow.
Nothing was done about profits. Declared profits have risen by 22 per cent. over the past 12 months. Let no one think, when talking to people who are paying higher prices in shops and in supermarkets, that they do not link in their minds the increase in prices that they pay with the profits of the stores and of the manufacturers from whom they buy their goods.
The second aspect of the Chancellor's statement concerned cuts in public expenditure, with severe cuts in education and in health, and notably in the regions. I mention the regions because this Government have concentrated their regional policy on infrastructure. Any cut-back on the infrastructure does real damage to the policy which the Government themselves have accepted as being the right approach to regional problems. The regional employment premium is to be phased out. The Common Market regional fund has turned out to be a fiasco. Unemployment will rise this year, apart from the three-day working week. Every hon. Member with a regional constituency knows that the first cut to be made when a firm runs into difficulties is its plant in Scotland, the North-West, Wales or the South-West.
The Chancellor of the Exchequer made something of the difference between what he called public expenditure and private individuals. For heaven's sake, does he not think that private individuals benefit from public expenditure? Are not the people who would be attending the health centres which are to be cut, private individuals? Are not the people sending their children to the schools for which the Government pay, private individuals? We had a sudden insight into the total


vacuum of the Chancellor's mind. For him there is public expenditure on the one hand and there are private individuals on the other who have some human and almost spiritual merit.
It was the public expenditure cute which brought the right hon. Member for Wolverhampton, South-West (Mr. Powell) back into the fold. The prodigal son came back because he sniffed the fatted calf. He thought that it was there. When he got there he was told that it was not the fatted calf—[An HON. MEMBER: "The golden calf."] That would be speaking too harshly of the right hon. Gentleman. That is language best reserved for others. The right hon. Gentleman has been brought back into the fold because in the theme of the Chancellor's statement he sensed some measure of a return to Selsdon Park.
I come now to the changes announced by the Chancellor of the Exchequer. We have, first, the trifling sniff at the property speculator, with £85 million coming from the whole property market in a year, if those engaged in it pay. Yet one company Land Securities increased its property by £278 million in the six months of phase 2. That is the extent of the Government's bold measure against the offensive speculator.
Then there is to be an increase in surtax of 10 per cent., but not for old surtax payers. Hon. Members who follow their constituency problems will know how many of us have written to the Chancellor about the taxation of pensions only to be told that every bit of income must be seen as taxable, but now we are told that if the person concerned is very rich, then, of course, the surtax payment does not have to be made. This is a perfect example of the two nations applied right up to the moment of national crisis.
Those who think that they are lucky to have escaped higher taxation by means of a general increase in income tax will find themselves being milked in other ways. Incomes will be cut by the three-day week. People will be driven out of employment. The steady and planned erosion of their incomes by inflation will be the taxation that the Government have planned for them. But it is a taxation conveniently done for the Government by the shopkeeper without actually

having to be put at the responsibility of the Chancellor of the Exchequer.
The House should ask itself why the nation should support such a policy, and on what grounds the Secretary of State for Employment can go to the country and ask working people to give him backing for a policy as manifestly unjust and unfair as the policy which he puts forward with his colleagues in the Cabinet. This is said to be due to stage 3, but stage 3 is totally out-dated by the very events that made the Chancellor bring his statement forward.
In any case, stage 3 is completely flexible. The right hon. Gentleman will have had time in his new Department to read the Counter-Inflation Act. He knows what its provisons are. A Minister, including himself—indeed, especially himself—can modify any pay deal to any extent at any time that he likes under stage 3 and can override the Pay Board at any time. The Minister is stage 3, if the House understands what I mean. To be told that there are 10 commandments or three stages that cannot be varied without bringing down the Lord Chancellor, together with Sir John Donaldson, like a ton of bricks is to deceive the people. There is no breach of the law in the miners' dispute. That at least is clear.
Since stage 3 came into operation the Government have removed from the Price Commission the responsibility for deciding the prices of all fuels. They have already made a major amendment to their own legislation in the last two weeks. Moreover, they have used that power of bringing the responsibility for coal and electricity back to Ministers not to keep down the price of coal and electricity but to raise it. Although the Prime Minister in an angry mood today denied it, it is absolutely clear that what the Chancellor said about coal and electricity prices is a direct breach of stage 3, because in the price and pay code was a pledge that the nationalised industries' prices would not go up more than allowable costs. So stage 3 has been broken. The truth is that the Prime Minister is set upon a confrontation with the miners.
I turn now not to the management or legislative aspects of this matter but to warn the Government solemnly that if they seek to resolve the issue with the


miners by trying to stir public hatred against them they will not succeed. It is astonishing, as any Member of Parliament who is active in his own area will know, that even older people now feeling the effects of electricity cuts, people with no direct or indirect connection with the mining industry, are sympathetic with what the miners are trying to do. That is a fact that the Government had better recognise.
My hon. Friend the Member for Midlothian (Mr. Eadie) referred to the miners' case over the years. I shall not weary the House with it. But anyone who has read the miners' arguments on energy policy will know that—against a Labour as well as a Tory Government—they have argued their case on the ground of national interest. Public sympathy with the miners is hard for the Government to appreciate, because they do not understand either the miners or the public.
The miners are not allowed to be heroes in Fleet Street, except for those not too rare occasions when one or two lie underground in the dark and damp as the rescue teams try to reach them. Then, for a brief instant, the mining communities are heroes; but for the rest of the time they are described as dangerous, radical and undemocratic militants.
It says a great deal for the common sense of the British people that they do not accept what the Prime Minister and the Chancellor say about the miners. There is far wider public sympathy for the miners than the Government appreciate.
If the Government were to be true to the doctrine of demand and supply in which they once believed, we should expect the price of coal and the wages of the miners who mine it to rise in a fuel shortage. It does not escape public attention that when a young married couple want to buy a plot of land on which to build a house the Government do nothing to stop supply and demand operating against that young married couple. That is not described as exploiting the community, although the man who sells his land at the market price is doing individually exactly what the Government now seek to denounce the miners for doing in their more modest wage claim. If the Government try to win

this battle, they will cost this country very dear. But in the end it is not a victory that can be won.
Underlying this whole debate is the fact that, from before they came to office, the Conservative Party, the Government of the day, had solemnly concluded that, until the power of the trade union movement could be tamed, they could not implement their policies. That is what the Inns of Court Conservative Association was about. That is what Selsdon was about. That is what the speech to the wives of Leicester was about—to separate the women from their trade union husbands. That is what the "lame duck" policy was about. That is what the Industrial Relations Act was about. Curiously, that is what part of the argument for the Common Market was about—that, in the wider disciplines of European capitalism, the British working class would more easily be brought to heel. In the Counter-Inflation Act and now stage 3, the Government think that they have found an issue on which they can try to go to the people and control the trade union movement.
But things have changed during their time in office. Although in 1970 some people were persuaded that the trade unions were the cause of inflation, and voted Conservative because prices would be cut at a stroke, it is now becoming obvious to more and more families that the only way to defend yourself and your living standards is by supporting the trade union movement. Indeed, where the pay is high, the unions are strong; where the pay is low, the unions are weak; and where starvation wages are paid, as in South Africa, the trade unions are illegal. Let us make no mistake—this is now becoming apparent to many people.
It will, of course, be a central theme of the Government in the election, whenever it comes, that this is a battle between the Government of the day and the trade union movement. But a great deal of sweat and effort and sacrifice and devotion has gone into the trade union movement. It will not be open to the Government. Whatever were to happen in the election—even, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, if the Government were to


win an election against the miners—none of these problems would be solved.
At a terrible cost to our social fabric, an embittered work force would face a Government with a parliamentary majority who still had nothing but conciliation or confrontation available to them as a policy. The question that many would ask is: if they had an electoral victory behind them, at what stage would that Government move over the line into a dictatorial control of the trade union movement?
The main responsibility for all this lies on the Prime Minister personally. He has done terrible damage to this country in the policy that he has pursued in respect of the trade union movement. It is absolutely certain that the policy that he has followed has not been in the national interest.
I want to conclude by trying to identify as best I can what is the basis of the national interest upon which we should now proceed.
First, I do not believe that the Dunkirk spirit and buckets of fake patriotism constitute a good guide to what we should do. I believe that we must put first things first, and the first things that must come first are a matter of common sense. A settlement of current disputes by direct ministerial action is in the national interest. There is legislative power to do it. The Secretary of State for Employment should do it. Lord Kearton says that it should be done. There are many other industrialists who can understand the international energy crisis but cannot understand why there should be an unnecessary national energy crisis at the same time.
Secondly, there must be an allocation of fuels, in consultation with industry, by political decision and not by market forces. It is in the national interest that industry should receive priority and the steel industry should be preserved.
Thirdly, it is in the national interest that the Government should take control of the oil supply out of the hands of the multi-national companies and see that the information available to the oil companies is made available to both sides of industry.
Fourthly, it is in the national interest that we should now begin to plan a massive investment programme in domestic fuel, North Sea oil, the coal industry, shale oil,

British reactors—which the Prime Minister promised would be British and not American reactors—and the necessary reorganisation of transport and fuel saving.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker): Nothing of the sort.

Mr. Benn: The right hon. Gentleman says that he said nothing of the sort. I hope that we shall have a clear answer tonight from him on the question whether they will be American reactors.
There is a national interest in seeing that the years of neglect of the investment programme in industry are brought forward by direct Government control and, as we say, an extension of public ownership. Indeed, if unemployment and recession reach the levels which they may reach, more lame ducks may have to be brought into the public sector, even by the Conservative Party. There must be first things first at home in dealing with the problems of poverty and social provision, of equality, of education and of pensions. These are the issues that are brought to the attention of Members of Parliament in their constituencies.
I am amazed that when Conservatives come to Parliament to debate economic matters they always make speeches based upon their knowledge of the City or of industry, but never do they represent, in the House, what must be brought to their attention—as it is to our attention, week after week—namely, the problems of people who are confronted with these economic policies. Every speech by a Conservative Member is always a speech from a would-be Chancellor of the Exchequer. These are the issues that are being pressed on the Government of the day by the trade union movement. Unless these issues of industrial and social priority are faced it will not be possible to win the consent necessary to overcome the situation that confronts us.
Some hon. Members, on both sides of the House, believe that the whole thing somehow hinges round a statutory incomes policy. But even a statutory incomes policy works only if it is accepted, or is voluntary. The only chance of getting a voluntary policy working is if the underlying problems


which the trade union movement brings to the Government to solve are settled in a way that meets the needs of its members. There is no substitute for consent in modern government. If the Secretary of State for Trade and Industry and his colleagues believe that they can fight an election on the issue of who governs Britain—which is what is alleged to be in store for us—such a campaign would be on exactly what the Labour Party would want to fight, because it would give us an opportunity to reveal to working people that what the Government pretend they can offer—affluence, and "never had it so good"—is really the concealment for the preservation of privileges of wealth and power and not to the advantage of the majority of our people.
It is open to the Government, at any time, to test the views of trade unionists by the ballot which the Government have enshrined in their legislation. If they believed one word of what they said about a handful of militants holding the country to ransom, they would do that and do it now. But they do not do it because they know that it is not true.
I would also point out to the party opposite that very great issues fall to be resolved. The year 1973 will be remembered not only because of the economic and oil crisis, but because, by general consent on both sides of the House, we recognise that we have come to the end of a certain road and have to choose how this country is to go forward. That choice cannot be made by a party elected on a programme that has had to be abandoned because it has no moral authority to set the course itself. The course can be set only by the British people in the ballot box, as soon as the new register bringing 7 million more of them onto the electoral roll gives us the opportunity to take this issue to them.

9.30 p.m.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker): I want first to add my words of tribute to those of the right hon. Member for Bristol, South-East (Mr. Benn) in congratulating my hon. Friend the Member for Hove (Mr. Sainsbury) on his maiden speech. Certainly, all those who were privileged to listen to that speech will pay tribute to

the lucid manner in which it was delivered and the interesting way in which my hon. Friend dealt with the problem. Anybody who won an election victory as he did at that moment of time, with myself as the eve of poll speaker, certainly enjoys my tribute.
In his speech earlier today, the Leader of the Opposition asked to be given fuller information about the oil and energy situation. This evening I want to bring to the attention of the House some of the decisions that have currently been made, and also to review the strategy for energy which this Government have been pursuing and will continue to pursue in the coming months, but before doing so, I wonder whether I can obtain the support of both sides of the House in paying tribute to a group of people who have had an enormous burden of work as a result of the energy problems of the last few months. I refer to the staff of my own Department, who have had to answer many thousands of questions and have worked very long hours in regional offices and in London, gaining praise from members on both sides of the House for the manner in which they have dealt with them.
As regards the charges made today by the Leader of the Opposition and repeated by the right hon. Member for Bristol, South-East, that no proper warning was given to the country about the problems of the energy situation, I wish to illustrate the manner in which, right the way through, proper warning was given and proper action was taken. The Government have been charged with complacency, primarily because the party opposite and many hon. Members on both sides of the House, as well as most newspapers, were urging that it was essential to introduce petrol rationing immediately. I do not believe that the case for that has been made out. Certainly, the current stocks of petrol do not illustrate that rationing was needed, or that it is needed at the present time; and any system of rationing that could have been quickly put into operation would not have resulted in anything other than considerable further disruption of industry and, I believe, considerable chaos as well.
It was absolutely right for this Government, first, to pursue a policy of building up our stocks of oil during the summer


months and then to take a series of actions, including cuts, in the months since the trouble in the Middle East. We have now distributed petrol coupons, and I believe that early in the new year it will be right to start dealing with certain categories of people who, if rationing had to be introduced, would obtain various supplementary allowances, so that in the event of the introduction of rationing there would not be unnecessary delays before those people knew the basis of their allocation.
There are also questions concerning the actions announced this week, and I wish to explain the very valid reasons why the decisions concerning the three-day week were taken.

Mr. Arthur Lewis: Will the right hon. Gentleman give serious consideration to a human problem? In many constituencies, including mine, old people have been dependent upon paraffin for their heating and cooking. Elderly constituents of mine are having to spend hours trying to get paraffin, and when they get it they have to pay 20p or 25p a gallon for it. The Department has tried to be helpful, but it has done nothing. Will the right hon. Gentleman look at this now, in view of the needs of old people and immigrants?

Mr. Walker: I appreciate some of the problems, and action is being taken to divert certain supplies of paraffin to areas where the demand has built up.

Mr. Lewis: What about the price?

Mr. Walker: I wish to make one announcement which I know is of considerable importance——

Mr. Lewis: What about the price?

Mr. Walker: —to hon. Members on both sides of the House——

Mr. Lewis: What about the price?

Hon. Members: Shut up.

Mr. Lewis: I have aged constituents who cannot afford to buy their paraffin. What about the price?

Mr. Speaker: Order. The Minister gave way to the hon. Member and the hon. Member must not now abuse his position.

Mr. Lewis: On a point of order. I have raised this matter with the Minister and his Department and I cannot get satisfaction. I raised it with the Price Commission and I cannot get satisfaction. I want some satisfaction.

Mr. Speaker: Order. This is not a matter of order for the Chair.

Mr. Walker: I have many matters to cover in a short time——

Mr. Lewis: What about the price?

Mr. Walker: I wish to raise with the House a matter——

Mr. Lewis: I walk out in disgust.

Mr. Walker: Mr. Walker —which many hon. Members on both sides of the House have brought to my attention, namely, the use of auxiliary generators. After the previous coal strike people who suffered electricity rota cuts decided not to be caught again and went on at no little expense to purchase their own generators to use on a standby basis to secure their own electricity supply in time of emergency. I applaud this preparedness, but their decision was based on the assumption that there was to be no scarcity of petroleum products, of derv gas oil or petrol used to drive the generators. That is not the case today. Restrictions on delivery have bitten into the industrial and commercial use of oil fuels, so that the wholly unlimited use of standby generation would avoid the effects of the shortage of central generating capacity for electricity only by enlarging the consumption of petroleum fuels which are in limited supply.

However, I am willing to permit the use of private generators in industry and commerce, though not for recreation and sporting purposes. This approval is conditional. Either they must run on waste or supplementary power, usually steam, which otherwise would be wasted, or the fuel must come from existing stocks of petroleum products which fall within the existing allocation of such products issued to the company. Thus, no supplementary allocation will be allowed for the use of generators. If organisations wish to make other economies or to switch fuel from one use to the running of standby generation, as long as it does not increase their total use of petroleum products, this will be allowed.

I wish to bring to the attention of the House the basis of the energy policy that has been pursued, not, I might add, with the support of the Opposition.

Mr. Robert Hughes: Mr. Robert Hughes (Aberdeen, North) rose——

Mr. Walker: I cannot give way. I have had one substantial interruption and I want the House to understand the present position. I wish to examine the steps taken to improve the supply of every indigenous form of energy which is available to this country, as a result of a review that took place about 12 months ago. The Government pursued a series of actions to that end.
Perhaps one of the most important was the introduction of the Coal Industry Act. I resent it when the right hon. Member for Bristol, South-East, who was a member of the previous Government and had energy responsibilities, accuses the present Government of being unfair and unreasonable to the miners, for in fact it was his Government that closed 276 pits. It was under that Government that tens of thousands of miners were made unemployed. [An HON. MEMBER: "With the support of the Tory Opposition."]
When the Leader of the Opposition now says that we should give an increase to the miners of more than 16½ per cent., he knows full well that an increase of 16½ per cent., with a guaranteed increase in the living standard of at least 9 per cent., is far better than any increase given to the miners during the period of a Labour Government. There is a myth created by the right hon. Gentleman about my party, the party that introduced the Coal Industry Act and did not just talk about it, the party that has substantially improved the miners' wages. Its policy and success for the miners contrast well with the Labour Party's.

Mr. Harold Wilson: Both parties have been wrong on this matter. We closed exactly as many pits as the Conservative Government before us. [Interruption.] No, in the three years before we came to office. These are figures for the Conservative Government. It turned out that we were both wrong. Is the right hon. Gentleman aware that when carrying out this policy we were putting a substantial floor under the market for coal, with the

coal burn arrangements and so on, but that the present Prime Minister said in the House at the time that in his opinion the closure of pits should move forward as fast as possible, faster than it was moving under the Labour Government?

Mr. Walker: We can be judged by our actions compared with the right hon. Gentleman's. Twelve months ago, when the present Government reviewed energy policy, we decided to inject £1,100 million into the mining industry. That was in no way criticised by the Opposition, but neither did they press for the action to be taken. It was an initiative by this Government, having reviewed the energy situation.

Mr. Eadie: Mr. Eadie rose——

Mr. Walker: The second sphere of indigenous supplies is North Sea oil. When the present Government decided to go ahead with developing oil resources in the North Sea as quickly as possible, that policy did not gain the Opposition's approval. I remind them that the then Opposition Front Bench spokesman on the subject, the hon. Member for Glasgow, Craigton (Mr. Millan) said:
I do not believe that the maximum rate of exploitation will necessarily provide the maximum benefit to the United Kingdom or Scottish economies."—[OFFICIAL REPORT, 27th July 1972; Vol. 841, c. 2088.]
Lord Balogh, who is always now quoted as the Opposition's great expert on oil matters, said only a year ago:
surely it would have been in the British interest to rely at the moment on relatively cheap supplies from the Middle East and to develop the North Sea slowly."—[OFFICIAL REPORT, House of Lords, 22nd November 1972; Vol. 336, c. 1005.]
When the Leader of the Opposition made a major speech on North Sea oil last January, he was not arguing that we should increase the pace of development there. Not one passage in the whole of that speech referred to it. He stated that there was no immediate energy problem and said that the whole world feared a desperate fuel and energy crisis in the 1980s.
That was the view the right hon. Gentleman was taking about North Sea oil earlier this year.

Mr. Dick Douglas: The right hon. Gentleman will recall that one of the Under-Secretaries in his Department in July this


year, in a debate which I initiated on the energy crisis, said that it was a "phoney" energy crisis.

Mr. Walker: I do not know about that, but I remember that it was the hon. Member for East Stirlingshire (Mr. Douglas) himself who said that
these difficulties, I submit, were made the greater by the policy decision to push ahead as fast as possible with the exploitation of the resources of the United Kingdom sector of the Continental Shelf."—[OFFICIAL REPORT, 5th February 1973; Vol. 850, c. 189.]
So he was one of the many Opposition Members, among many other people, who earlier this year were voicing the view that we were exploiting the North Sea too quickly.
In the past year we have taken a great deal of administrative action to speed up developments in the North Sea. We have set up the offshore supplies office. We have used the Industry Act to a considerable extent to encourage British, including Scottish, firms, and we have given special allocations of steel to see that every possible action should be taken in this sphere.
So, in terms of coal and in terms of the North Sea, this Government, before the present crisis, took these decisions.
I turn to nuclear energy—a matter raised by several of my hon. Friends and Members of the Opposition. We reviewed energy policy before the present crisis. We decided to set up the Nuclear Power Advisory Board and a major production company swiftly and effectively to develop our nuclear resources.
This policy of the Government was not welcomed by the Labour Party. When it was announced, there was no praise by the right hon. Gentleman or anybody on his side of the House for a major, important and fundamental reorganisation of the energy industry.
My hon. Friend the Member for Abingdon (Mr. Neave) has several times expressed concern about the choice of reactor, but he knows full well the composition of the advisory board that we have created; he knows it contains the finest men of Britain's considerable ability in this sphere. We have looked at every alternative form of reactor available to us, and our choice will be made taking careful consideration of

safety factors and of the speed with which the reactors can come into production.

Mr. Neave: Will my right hon. Friend publish a Green Paper on the recommendations of his advisory board and have the matter debated in the House?

Mr. Walker: I shall certainly publish very full details of our decision on the basis of the advice we receive, but my hon. Friend knows full well that the opinion expressed to us by people whom he knows, such as Sir John Hill—whom he respects and admires—is, rightly, that the advice they give to me must be confidential. We have great need of that. If any one of them wishes, for example, to express an opinion that a particular type of reactor is not safe, and gives his reasons for it, that view could not be published in a certain form without the possible result of legal action. It is perfectly plain that an advisory board of this nature should be able to give confidential advice to the Minister concerned, but obviously it would be the duty of the Government to give details of the basis on which they came to their conclusions.
I hope that early in the new year we shall make decisions in this sphere, and we can then go ahead with a programme of nuclear energy which will make a considerable contribution to our energy resources.

Mr. Eadie: This is an important point. The Secretary of State said that he was about to reach a decision in the new year. I am sure he knows that the Scottish TUC's Fuel and Power Committee is proposing to meet him. Will he meet the committee before he makes his decision?

Mr. Walker: I have no idea when that meeting is to take place. There is plenty of time for those who wish to do so to put their views to me. Therefore, in another sphere, before the crisis, decisions were made by the Government.
Turning to gas, it was the Government who decided earlier in the year to negotiate the purchase of half of the Frig field belonging to the Norwegians and thereby to increase our potential gas resources. Rather than being complacent about the energy situation in the months


before the immediate crisis, the Government in terms of coal, nuclear energy and gas and the development of every form of indigenous resource were making the necessary decisions.
I come to the present crisis, and I wish to deal with the situation in terms of both coal and oil.

Mr. Robert Hughes: Mr. Robert Hughes rose——

Mr. Walker: No, I cannot give way.
As regards oil, from the very beginning when the first announcements were made after 15th October I made clear to the country that, if necessary, I would introduce petrol rationing, and I announced that we were enjoying substantial stocks and that further oil supplies were available across the sea. I have already said at this Dispatch Box that the future remains uncertain: nobody can accurately predict what will take place.
I was originally advised in November that our imports of crude oil would probably be 8 per cent. down on what was expected. In the event, they were not down at all. I was advised that there would be a reduction of 15 per cent. in imports of crude oil in December. I again said that the position was uncertain, though I suspected that the position might be better than was thought. The latest figure is that we shall this month be 10 per cent. short in our imports of crude oil and not 15 per cent. short.
For January, against an estimate of a 20 per cent. shortage, the current prospect is that there will be an 18 per cent. shortage of crude oil. Finally, we decided during a review of imports of certain manufactured products to take a certain action. We did so before almost any other country in Europe or outside. We have managed to pursue a policy which has kept our stocks at relatively high levels in most of the major spheres of activity. We first of all took the decision to make the 10 per cent. cuts based on last year's figures. Those cuts are in operation at present. Last week our stocks of petrol actually rose and did not go down as they normally do at this season.
One sphere in which we face potential difficulty, although we still have tolerable stocks at present, is that of fuel oil. In this respect, in view of the increasing shortage of coal, we have had to divert

a considerable amount of fuel oil for the benefit of power stations. The decision in terms of a three-day working week was based not, as the right hon. Gentleman the Leader of the Opposition suggested, on some political move, but on the prospect—as I advised my Cabinet colleagues, on the best information I had—that if the present loss of production in the coal mines continued in the coming weeks, by the middle of January we should be facing cuts from the power stations which we could not control, with all the potential dangers of that situation, and that within two or three weeks after that it would bring industry to a total standstill. I therefore advised my colleagues that it was essential to reduce the power from the power stations by 20 per cent. so long as this position continued and we were not getting normal supplies of coal.
The tragedy of the present situation is that not only are we not getting the supplies of coal, which is resulting in this major disruption of industry, but we have aggravated the shortage of fuel oil by using it instead of coal. If we were getting full production from the mines, we could have been saving in our power stations up to 50 per cent. of the fuel oil normally used. This would have made an enormous contribution.
When they say that no warning was given, I remind the Opposition that when the coal strike—[Interruption.]—when the overtime ban first took place and the Government sought to take emergency powers, it was not we who were complacent about the dangers of such a disruption—it was the Opposition. It was the Opposition who claimed that it would hardly bring about any disruption. There is quotation after quotation showing that this is what hon. Members opposite thought. On 13th November I said:
If 13 million tons of extra coal is used by the Central Electricity Generating Board, this could save the country 6 million tons of oil at this crucial time. This is a time when the effects on power as a whole could have a considerable impact on the potential growth and our whole export performance. This is a time when it is vital for the industry to recognise the damage which it will do to its own future.'—[OFFICIAL REPORT, 13th November 1973; Vol. 864, c. 285.]
That is in stark contrast to the complacent words of the Opposition.
At that time, the Opposition Front Bench specifically stated that they were


against the miners going for a ballot of their own. The hon. Member for Chesterfield (Mr. Varley) said categorically on 13th November that he thought it wrong for the miners to go to ballot on this issue. Why did the Leader of the Opposition change his mind last Friday? He said then:
I would support a nationwide ballot of the mine workers, even though moderate miners leaders feared that it might produce a devastating result …
The right hon. Gentleman wanted it then despite the fact that he thought that it would produce a devastating result.

Mr. Harold Wilson: At the meeting a month before, most of the moderates said that they did not want a ballot because they feared the result and it might lead to a general strike. The militants did not have to say a word. I said what I did last week, and still think it right, but the union must decide on the timing. If the right hon. Gentleman wants a ballot, why does not he use Section 141 of the Industrial Relations Act?

Mr. Walker: The right hon. Gentleman allowed the hon. Member for Chesterfield, speaking from the Opposition Front Bench, to say that the Opposition were against a nation-wide ballot. But I am pleased to say that last Friday the right hon. Gentleman changed his view. Now he is trying to change it again. He is apparently arguing against a ballot, whereas on Friday he wanted one.
Throughout the whole of this period, if the Opposition had at any stage told the miners that the offer of 16½ per cent. is better than anything the Labour Government ever offered, and that if they continued their industrial action they would do immense damage to the economy, they would have made a better contribution to the country than the one they have made.

The Parliamentary Secretary to the Treasury (Mr. Humphrey Atkins): I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

Orders of the Day — STATE OF EMERGENCY

Message from Her Majesty [12th December]—considered.

Mr. Speaker: The Message from Her Majesty is as follows:
The Emergency Powers Act 1920, as amended by the Emergency Powers Act 1964, having enacted that if it appears to Her Majesty that there have occurred or are about to occur events of such a nature as to be calculated, by interfering with the supply and distribution of food, water, fuel or light, or with the means of locomotion, to deprive the community, or any substantial portion of the community, of the essentials of life, Her Majesty may, by Proclamation, declare that a state of emergency exists: and Her Majesty having on the thirteenth day of November, 1973 made, in pursuance thereof, a Proclamation declaring that the industrial disputes affecting persons employed in the coal mines and in the electricity supply industry did, in her opinion, constitute a state of emergency within the meaning of the said Act of 1920 as so amended, which Proclamation does not remain in force for more than one month: and the continuance of the said industrial disputes, the present industrial dispute affecting persons employed in the railways and the reduction in oil supplies reaching Great Britain having, in Her Majesty's opinion, constituted such a state of emergency as aforesaid:
Her Majesty has deemed it proper, by Proclamation dated the twelfth day of December 1973 and made in pursuance of the said Act of 1920, as so amended, to declare that a state of emergency exists.

Resolved,
That an humble Address be presented to Her Majesty, thanking Her Majesty for Her Most Gracious Message communicating to this House that Her Majesty deems it proper by Proclamation, made in pursuance of the Emergency Powers Act 1920, as amended by the Emergency Powers Act 1964, and dated 12th December 1973, to declare that a state of emergency exists.—[Mr. R. Carr.]

To be presented by Privy Councillors or Members of Her Majesty's household.

Orders of the Day — EMERGENCY POWERS

Motion made, and Question proposed,

That the Regulations made by Her Majesty in Council under the Emergency Powers Act 1920 by Order dated 12th December 1973, a copy of which was laid before this House on 12th December, shall continue in force, subject however to the provisions of section 2(4) of the said Act.—[Mr. R. Carr.]

10.0 p.m.

Mr. Albert Booth: There appears on the Order Paper in connection with the item before us a note to the effect that the instrument has not yet been considered by the Joint Committee on Statutory Instruments. This may, unintentionally, have led hon. Members to believe that the Committee had no objection to the form of the regulations, but that is not so.
I understand the technical reasons for the note, but when the committee considered the original regulations that are being continued tonight it decided that they should be brought to the special attention of the House on grounds that I shall outline.
For more than half a century it has been the law of our country that there should be a specific protection for people against the abuse of emergency powers such as those we are adopting tonight. The Emergency Powers Acts of 1920 and 1964 provide that no regulations shall be made under those Acts that impose industrial conscription or make it an offence for any person to take part in a strike or peacefully persuade any other person to take part in a strike. I contend, therefore, that it is totally illogical for the Government, by regulations, to impose on those taking industrial action less far-reaching than a strike penalties that they cannot by law impose upon strikers. Yet the terms of the regulations are open to that interpretation. That is to say, a logical interpretation would suggest that they contain penalties that could be imposed on people taking action short of a strike.
Regulation 32(1) provides as follows:
No person shall do any act with intent to impair the efficiency or impede the working or movement of any vessel, aircraft, hovercraft, vehicle, machinery, apparatus or other thing used or intended to be used in the performance of essential services, or to impair the usefulness of any works, structure or premises used or intended to be used as aforesaid.
On any commonsense interpretation of the English language those terms are wide enough to cover the imposition of an overtime ban or a work to rule, or a refusal to undertake specific duties or even to carry out piecework agreements.
Almost any industrial action in the furtherance of a claim by a trade union for an improvement in wages or conditions, must, if it is to be effective, impair the efficiency or impede the working of the employer's business. It must therefore be caught up in the definition contained in Regulation 32(1). If it is not intended by the Government that Regulations 32(1) and 32(2) should be interpreted in that way, it is open to them to include within the regulations words that would protect anybody who was taking industrial action short of a strike. However, there is no attempt to do so and no indication in the regulations that that is the case.
The miners' overtime ban, for example, must be a case of a number of men omitting to do something with intent to impair the efficiency or usefulness of something used in the performance of essential services. It must be seen in that context. An overtime ban must impair the provisions of that essential service. Therefore, it is directly at variance with the provisions of this set of Emergency Powers.
People who are caught up in the provisions of Regulation 32(1) cannot claim the defence that they are engaged in a strike unless they are engaged in official strike action. It seems essential that it is made clear tonight that that was not the intention of the regulations. I hope that we shall be informed by the Secretary of State for the Home Department that the regulations have been drafted without a realisation of the meaning of the words, strange though that may seem, and that it is not the case that Regulations 32(1) and 32(2) shall be used as a means of imposing a penalty on men who do something short of strike action in furtherance of any legitimate trade union objective in a way which could not be used against anybody who pursued an active strike.
If the regulations were to be used to impose penalties on men who engaged in overtime bans or any other industrial action short of a strike, I hold that it would be at variance with what has been the intention of the House in passing Emergency Powers Acts. Regulation 38 fairly and rightly repeats that a person shall not be guilty of an offence under any of the regulations by reason only of taking

part in or persuading another person to take part in a strike.
I put it in all seriousness to the Secretary of State that that cannot protect somebody who is not striking but is engaging in an overtime ban or a work to rule. Therefore, I hold that the provisions of Regulations 32(1) and 32(2) can be open to the interpretation that they will apply to people who are not striking.
In the special circumstances which now exist—namely, at the time of a crucial fuel problem—all people rightly regard the supply of all sorts of power and energy as essential services. Similarly, in circumstances where means of transport are subject to fuel problems, transport may also properly be regarded as an essential service.
I ask that the regulations shall not pass through the House tonight without a clear assurance that the meaning of Regulations 32(1) and 32(2) is not that people who are not strikers will be in breach of the emergency powers. I hope that we shall also have an assurance that the regulations will be relaid to make that clear so as to give protection to people who engage in industrial action short of striking, which they are required to have by law if they engage in strikes.

10.9 p.m.

Mr. David Waddington: I cannot see that there is any difficulty in understanding the purport of the regulations, nor do I imagine that they could be applied in a manner that would be contrary to the interests of the community or the individual.
The purpose of Regulation 32 is plain. To begin with, it is headed "Sabotage", and the offence that can there be committed is one that involves a specific intent. It is the intent
to impair the efficiency or impede the working or movement of any vessel".
If a person decides not to work overtime, or to go slow, he does not infringe these regulations. If he indulges in industrial action with a specific intent to do damage of the kind referred to in Regulation 32, he infringes the regulations, and I believe that it is quite right that mischief of that kind should be caught by the regulations.
It is nonsense to suggest that the person who goes slow is in a worse position than the person who goes on strike.
Regulation 38 contains the protection that is afforded to the striker and to the person who peacefully persuades another person to go on strike and who does not have the intent to commit sabotage, which is the intent referred to in Regulation 32.
Taking the two regulations together, the striker is not put in a better position than the person who goes slow, and the person who goes slow is not put in a better position than the striker. The striker is protected if he is acting in a legitimate fashion and is merely peacefully persuading. The person who goes slow is protected if he is only trying to get better terms and conditions for himself and his workmates. If a person goes slow with the intention of doing great damage to the community by committing sabotage, he is rightly caught by the regulations. If a person goes on strike with the intention not of improving his working conditions but of committing sabotage, he again is caught by the regulations.
It is worth pointing out that people need not be frightened by these provisions. They have always been a part of emergency regulations and, what is more, I gather that in our history there has not so far been a prosecution under any of them. But it is right that these powers should exist in case anyone should be minded to think that he can indulge in any sort of industrial action when he likes, even though his motive is not to improve his working conditions but is purely and simply to damage the community in the way envisaged in Regulation 32.

10.13 p.m.

Mr. Arthur Latham: I support the contention made by my hon. Friend the Member for Barrow-in-Furness (Mr. Booth). Unfortunately, I was present to hear only the latter part of his speech. However, I am aware of the point that concerns my hon. Friend and others who serve on the Joint Committee on Statutory Instruments.
I wish that the position were as simple as that described by the hon. and learned Member for Nelson and Colne (Mr. Waddington). If Regulation 32, under the heading "Sabotage", could be

applied only against people who were seeking deliberately and for no other motive to undermine any emergency provision, it would not have been thought necessary or appropriate to provide in Regulation 38 the exemption for those taking part in a strike.
It is the view of learned counsel who has advised the Committee that as the emergency regulations are drafted they could be open to the interpretation that whereas Regulation 32 could not be applied to someone on strike it could be applied to someone taking industrial action short of the actual withdrawal of labour.
A representative of the Department tried to draw a distinction between an omission, referred to in Regulation 32(2), and what he described as inactivity on the part of workers. Frankly, no other lawyer has so far been prepared to support that view and no precedent to establish that in legal terms there is a distinction between an omission to perform a duty and the inactivity so conveniently used and put forward in evidence was given to the Select Committee. The Secretary of State's advisers ought to consider whether, in the event of any future emergency regulations, this point ought to be completely clarified.
When a Government, for good reasons or bad—no doubt for reasons which appear good to that Government—decide to recommend the declaration of a state of emergency and to introduce emergency regulations, that is an acknowledgement or recognition that normal administrative arrangements, legislative processes and recourse to law have broken down because of the emergency. It would not be right to argue the merits or otherwise of the declaration of the state of emergency. The point is that in a national catastrophe, an earthquake, an outbreak of plague, or some other disaster—a situation that can arise once in a lifetime, or even once in a decade—it is reasonable for a Government of any party to declare that the normal process of law has broken down and that certain Members of Her Majesty's Government must act in certain spheres by edict or decree rather than by normal parliamentary processes.
Regardless of the merits or otherwise of the situation, when emergency regulations are introduced on no fewer than


seven occasions in three and a half years some re-examination of those emergency regulations is called for. For seven months in three and a half years the Government have had to use the emergency regulations. That means that on one day in seven in those three and a half years the normal processes of Government administration and law are acknowledged to have broken down.
Although it has been the practice to introduce the same or similar regulations in states of emergency that have occurred since 1945, I suggest that it might now be time to re-examine and review the emergency regulations that obtained before against the broad canvas of public attitudes and what is now on the statute book.
The powers that the Government seek to take for two months in these emergency regulations go far beyond what could reasonably be thought to be necessary. In asking the House to renew these emergency regulations now—and perhaps yet again in another month—the Government should try to justify the argument that there has been a breakdown in the normal processes of law.
As a Member who likes to feel that he is a champion of civil liberties and the ordinary citizen's rights, I am worried not only about Regulation 32 but about Regulation 36, which provides that
Where a constable, with reasonable cause, suspects that an offence against any of these Regulations has been committed, he may arrest without warrant anyone whom he, with reasonable cause, suspects to be guilty of the offence.
Under the regulations, therefore, somebody can be arrested on suspicion without warrant.
It is also argued that the regulations provide for offences only where someone prevents a person from carrying out a public duty. There is not time to go over every one of them, but in many of the regulations power is given to the Secretary of State concerned, if he deems it necessary, to require workers and others to perform actions as a matter of duty. If, under the regulations, a duty may be determined by the Secretary of State, the hon. and learned Member for Nelson and Colne is wrong in his understanding of what is meant by "duty" and an "infringement" of the regulations.
It seems clear from the regulations as a whole that, where a Secretary of State—various Secretaries of State are involved in the regulations—determines that an action has to be performed as a matter of public duty, it is a breach of the regulations, subject to the punishments listed, if anyone not only fails to perform that duty but commits any act that might discourage others from so doing.
I recognise that there is little hope of the House doing other than approving these emergency powers, but in a state of emergency the assumption always seems to be that, because the civil servants and Ministers concerned are gentlemen, there is no danger of any misuse or abuse of the powers. I do not want to suggest that the Government and their Ministers are necessarily ungentlemanly, by that definition, but it is ironic that a House which on other occasions is so jealous of its rights and so anxious to safeguard the process of law should be approached so lightly, two months running, by a Government who proclaim so profoundly to believe in the rule of law, with the proposition, "Let us abandon normal processes and let the Government take in certain respects virtually dictatorial powers".
If we have further regulations in future, they should be examined in the light of what is now on the statute book and, most important, only if they are carefully studied should Ministers ask for powers which go beyond the normal statutory authority. They should satisfy themselves and be required to satisfy the House that each and every one of those powers is necessary and relevant to the emergency with which they claim to be dealing.
I am very unhappy that we are now to have a seventh period of emergency rule. If it happens again, in the near or distant future, under any Government of any party, I hope that care will be taken to ask for powers to go beyond what it is reasonable to expect in a mature parliamentary democracy.

10.23 p.m.

Mr. Arthur Lewis: May I start by apologising to you and the House, Mr. Deputy Speaker? Earlier this evening I raised a point in an interjection and I thought that the Secretary of State for Trade and Industry evaded


the issue. I was not able to develop my point, but I think that I can now do so, with particular reference to Regulation 21.
This regulation refers to the supply of fuel and refinery products and the consumption of solid or liquid fuel and refined products. In my constituency—this is true of the constituencies of many hon. Members, especially on this side—there are many poor old age pensioners, people on low incomes and immigrants. Most of these people have for some time relied on the supply of paraffin oil for heating and cooking. They have done this in the past not because they particularly chose to have paraffin oil but because it has been a cheaper commodity, and easier for them to use for keeping their homes warm and for cooking the little bits of food that they can afford.
Since the emergency started we have heard the Minister say—I have not heard this disputed—that his Department has been doing a wonderful job in the supply and allocation of petrol for motorists. With the greatest respect, I suggest that the Minister has not even attempted—though he has the regulations enabling him to do so—to ensure that, first, there is an adequate supply of paraffin and, as the regulation says,
Where any fuel or refinery product is supplied to any person in pursuance of a direction under this Regulation, that person shall pay such price in respect thereof as may be reasonable.
What does the Minister feel to be reasonable?
Like many of my hon. Friend's constituents, including those of my hon. Friend the Member for Paddington, North (Mr. Latham), many of my constituents are old-age pensioners. At present they are having to spend hours walking around trying to obtain paraffin from garages and suppliers. They are finding difficulty in obtaining any supplies.
I give all my constituents pre-paid printed postcards so that they can easily arrange an appointment for me to go to see them in their homes. One of my constituents is an old lady, aged 85. She explained to me that she had spent two hours going from garage to garage. The answers she got were that they had no paraffin, that they were limited in supply or that they had their regular customers.
After two hours she could get no paraffin. She happened to tell a schoolboy of her trouble, and he said that he would try to get her some paraffin, which he eventually did. She said to me, "It cost me 23p for a gallon, and I had to give the schoolboy a couple of coppers for his trouble, even though he did not want to accept it". That means 25p a gallon—five shillings in the old money.
This is not a matter of luxury, of driving around in a car. It is not a matter in which old-age pensioners can do anything else, because pensioners could never afford gas and electricity for heating and cooking before the crisis. They now have Valor-type stoves in their homes. Before going to bed, they put on the stoves their grog or drop of milk to warm it. Some are lucky enough to have a television set, as is the lady that I have mentioned. When she is watching television she puts a little milk on her Valor stove.
This old lady is being inconvenienced and subjected to suffering by spending two hours traipsing around the streets trying to get paraffin and being unable to get it except at an exorbitant price. But when I take up this matter with the Minister, he refuses to do anything about it. I shall feel like opposing these regulations unless the Minister can assure me that, just as he has said that garages may not charge more than 40p for a gallon of petrol, he will see that paraffin is not sold for more than a few coppers in excess of what it cost prior to the emergency.
Alternatively, I have a suggestion for the Home Secretary. Local authorities use paraffin in connection with their work. Is it possible to advise them that they should have available at their depots supplies of paraffin for old-age pensioners? I go further and say that, according to the Chancellor, it is the object of the Government to help the hard pressed and under privileged. Is it possible to arrange for local authorities to supply, say, a gallon of paraffin a week at a subsidised price, or even free, on production of an old-age pension book? That would help the old-age pensioners to get the supplies which they cannot get at the moment, and would also help them financially, at relatively little cost to the Government. If the price of paraffin cannot be subsidised, it is surely possible


to arrange for it to be supplied at cost price.
There is no question of interfering with private industry. If private garages are short of paraffin, they may not want to supply the odd gallon here and there. But local authorities could be allocated supplies by order of the Minister and it could be made widely known that old-age pensioners, immigrants and the sick and disabled—whose records are held by the welfare departments of local authorities—would be able to obtain supplies. I therefore ask the Minister for an assurance that he will take some action to see that the price of paraffin is reasonable, and that supplies are allocated to these people.

Mr. Latham: Some of us have expressed doubts about the validity of the emergency regulations. My hon. Friend is making a very proper plea for one special category, but does he agree—perhaps the Minister will take note of this point—that what he is asking for, as well as many other courses of action, could be provided for under the Fuel and Electricity (Control) Act, and that these emergency regulations are not needed to deal with the situation which he has described?

Mr. Lewis: I am much obliged to my hon. Friend. He may not know that I sat through the whole debate this evening trying to get into it but, as is customary, only the usual speakers were called, so I was unable to make my point earlier. I am therefore doing that which is customary—perhaps it is a subterfuge—and making my point under these emergency regulations. However, I agree with my hon. Friend and I am not greatly concerned whether what I am asking for is done under these regulations or any other regulations. All I want is an assurance from the Minister that he will make paraffin readily available to the elderly, the sick and disabled, and the immigrants. I want an assurance that they will be able to obtain it, preferably from local authority depots, at wholesale price. If that is arranged it will help pensioners financially and will save them from suffering.

10.35 p.m.

Mr. W. R. Rees-Davies: I wish to refer to Regulation 21, which deals with the Secretary of State providing for the regulation of the

supply, acquisition or consumption of solid or liquid fuel and the supply and consumption of electricity. My right hon. Friend the Secretary of State for Trade and Industry tonight gave a most unsatisfactory reply about those who supply their own generators and, more particularly, their own fuel. I have already seen about half a dozen Ministers on this matter. We are faced with a situation in which the Department is imposing upon us a dictatorship. We are told that those who were far-sighted enough to provide generators and the fuel which they need are, without previous notice, to be refused the opportunity to run them.
The horseracing industry is essential in many ways. In the event that it had to close down there would be large-scale unemployment, quite apart from the loss of pleasure to a great many people at a time of great difficulty. If the Government are set upon the course which my right hon. Friend announced tonight of cutting out recreational and sporting pleasures it will mean that they are drawing a great distinction between outdoor sports and indoor sports. Not only will there be discrimination against horse-racing, greyhound racing and football, but these will be discriminated against in favour of bingo, chemin de fer, and blue films. It is intolerable that the Government should consider themselves entitled to dictate to this country that those who have been far-sighted enough to make themselves totally independent should be denied the right to use the resources they hold in their own command.
In the case of horseracing, Weatherby's some time ago provided its own generators. It also provided its own fuel. Races cannot be run without the Racing Calendar. With a profound knowledge of the subject I have tried to persuade Ministers that we should be allowed to run horseracing provided that it does not ask that even one gallon of precious fuel is consumed to the detriment of the people of this country. But I am not prepared to accept the claptrap argument that the people so lack common sense that they cannot understand that certain industries have made arrangements well in advance, as did Weatherby's. The company knew that there might be a fuel crisis and therefore arranged to have a generator. One cannot run racing


without the Racing Calendar—a registered newspaper which publishes in advance all the entries, which is essential to racing with a handicap.
The Government have arranged that computers shall be exempt, but they have forbidden the use of generators, and they have even forbidden anyone to use the fuel supplies which he has. I am net concerned with the moral argument whether it is right or wrong that racing should continue, but if it is decided to refuse to have racing, bingo should be stopped, films should be stopped, theatres should be stopped, concerts should be stopped, and all the other entertainments which the nation enjoys. One cannot draw a distinction between one and the other. It is intolerable.
What is more, I see no reason why one should pick on greyhound racing for attack. Six or seven years ago, I advised those concerned in greyhound racing, among others, to provide a generator for each of the 42 tracks operated by the National Greyhound Racing Club. The operators of these tracks found themselves, last Friday, without a word of notice, confronted with an order which, quite contrary to what they had believed, literally stopped them in their tracks. None of them could run. They had to close all their night meetings at once. To switch to afternoon meetings means economic death. At Wembley the day before yesterday, a mere 400 people attended. If greyhound racing is killed economically, it puts out of work 10,000 people who are permanently employed on those tracks, and over 30,000 casual employees.
The trouble is that, despite my efforts, Ministers simply do not understand this case. They refuse to understand it. This is quite wrong. I have spent as much time as I can in trying to explain the case to Ministers at the Department of Trade and Industry. They really must accept it from those of us who have far longer experience of these matters than they have.
One of the main criticisms of Government today is that Ministries, and especially civil servants, totally fail to understand a case that is put to them. They will not believe that one has a case to put. They do not believe that one has no axe to grind. I have no axe to grind

here. I do not hold shares or any interest in either of the industries for which I speak tonight.
I am very angry about what has been done. I find it intolerable to have to criticise my own Government in this way but I shall continue to criticise them until they give way on the matter. I am glad that my hon. Friend the Minister for Industry has arrived, because I had the opportunity to speak to him about it. I must tell him straight that he is not a Minister of morals. His ministerial responsibility is to conserve fuel and power. If we are to talk about morals, let us talk about beer, about spirits, about drugs. I am quite prepared to talk all night about them. But I am not prepared to accept that he, the Home Secretary or any other Minister has the right to dictate to this country what shall be our moral code. It is intolerable.
Greyhound racing is as much entitled to earn its living as any other industry is. Fuel rationing has not been introduced, and I consider that a perfectly correct decision. But let no one try to introduce it by a back-door method. That is quite wrong.
At present, there are 42 greyhound racing tracks. Many years ago, as a result of their foresight, they introduced generators. Over six months ago they decided to obtain a sufficient supply of fuel oil so that they would not interfere with the country in the event of fuel rationing. They have sufficient to carry them through to next April. They do not ask for any favour from the Government. They do not ask that they shall have one kilowatt of electricity. They do not ask that they shall have one gallon of fuel oil. But they do ask that they may be entitled to use their foresight to ensure that they maintain their industry, and are not economically crippled. If they are closed now, they will not be able to reopen satisfactorily.
The effect will be twofold. First, there will be a great deal of unemployment among people who have served the industry for many years. Secondly, there will be a considerable loss of revenue to the Government in the form of the taxes that would have flowed from the industry. I do not suggest that that is of particular importance, but it is wrong to suggest that the Department of Trade and Industry has a superior understanding of


the attitudes of the British public. I have talked about the matter to many people in the street—taxi drivers, and ordinary people—and the general attitude is that if it is explained to the public that the greyhound racing and the horseracing industries have been far-sighted enough to provide the generators and the fuel to enable them to carry on, it would be wrong to stop them.
I turn to the question of the football industry. I know that some grounds have not been able to provide the generators and the fuel required. I am sorry, but that is so. There are a few that have, and they must have the advantage of having done so. It is a tough life.
I have raised this matter with almost all the Ministers concerned. It is, unfortunately, the Home Secretary who is to reply tonight. The mistake lies with the Department of Trade and Industry, which has for long failed to understand the whole background of both tourism and sport. We have tried for a long time to make it understand the interests of those people who are engaged in the leisure industries. Somehow, it has never been able to equate leisure with heavy industry—nor has the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). I remember years ago debating with him the difficulties that arose when he was dealing with totally different matters, such as the amusement and catering industries.
I appeal to the Department to understand that we are dealing with only one principle, namely, that we should save fuel. We are not dealing with a ragbag of suggestions that we should try to dictate the morals of this country. That is wholly wrong.
I am speaking because I could not intervene earlier and because I have not been able to put this case across to the Cabinet Ministers who are responsible for making the decision. If we are to arrive at the right decision for the state of the nation as a whole we must recognise that in the control of both electricity and fuel we should not be prepared to attack those who have been far-sighted enough to make the necessary preparations.
In the case of the horseracing industry, all that is required is that we should be

able to continue to publish a registered newspaper. The computers used at Wellingborough by Weatherby's are protected For three days a week they can obtain supplies, but for the other three they cannot. Weatherby's does not want to use the electricity supplies in the slightest degree. It wants to have the opportunity to use its own generating power when there is an acute shortage. It wants to be able to use its own fuel, of which it has 35 days' supply, in the event of this emergency. It is not seeking to oppose the Government or their policy; it is merely asking that it should be allowed to use the fact that it has conserved its own fuels by bringing them into use without causing harmful effect to anybody in Britain, and at the same time, to be able to maintain an industry which provides employment for many and fun throughout the world.
It would be a sorry day for Britain if they had to close down racing in Britain today merely because of the Government's lack of understanding of the problems of the day.
The same consideration applies to the greyhound racing industry. One may not like it, or one may think it a luxury sport. One may think that bingo, casinos, or all forms of entertainment are luxury sports, but it is not for the Government to differentiate between one industry and another. I detest classical music, but if I suggested closing the Royal Opera House there would be an appalling outcry.

Mr. Arthur Lewis: Or carol singing.

Mr. Rees-Davies: Or carol singing, or anything else. I want to see fairness between one industry and another. The only way to get that is to stick to the principle of conserving fuel and forget the emotional claptrap. We should get rid of that attitude of mind and introduce what we need. I shall oppose these regulations, if anybody else will join me, until I am satisfied that we shall get fairness for these industries.

10.52 p.m.

Mr. Ronald King Murray: I join with my hon. Friends in condemning the excessive width of Regulation 32. This deals with sabotage


Subparagraph (1) of that regulation strikes at
any act with intent to impair the efficiency or impede the working
of specified things.
In subparagraph (2) the same provisions are applied arbitrarily to any omission. When one is dealing with an act under subparagraph (1) it is essential to put in the words "with intent to impair" because, plainly, an act may be done without intent and such an act should not be struck at as sabotage. Subparagraph (2) excludes "with intent to impair", which is the qualification in subparagraph (1), but it is plain that an omission is not an intentional act of any kind. It is crucial that it should be implied that an omission which is struck at by subparagraph (2) must be intentional.
I look in vain to find words of qualification which may have that effect. If one reads "short" in that subparagraph
The foregoing provisions of this Regulation shall apply in relation to any omission … as they apply to the doing of any act by a person",
even though that takes us part of the way to qualify the excessive width of subparagraph (2), because "such" is then omitted, before "act", there is no reference back to the qualifications in subsection (1). Not only is that omitted; when one comes to the words I have deliberately left out—
on the part of a person to do anything which he is under a duty, either to the public or to any person, to do…".
far from limiting, subparagraph (2) would appear to me to spread it even wider.
In these circumstances, it appears that if this form of words has been hallowed by precedent it is a bad precedent, and the sooner we depart from it the better. I do not think that regulations of this sort should be put before the House unless they contain a clear intention that they are to apply only to intentional omission. I feel inclined to vote against the regulations as they stand, but I shall listen to what the Minister says in reply.

10.55 p.m.

Mr. James Lamond: The Secretary of State is asking us to extend for a further 28 days emergency

regulations. I am prepared to support him in any efforts he makes to resolve the emergency which exists, but I am a little reluctant to support him tonight because I want him to tell us, first, what action he has taken under the regulations so far which he could not have taken under the existing law. If he cannot tell us of fairly substantial action that he has taken already, why was he so hasty in asking for these regulations in the first place?
My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) has complained about the lack of action under the emergency regulations. I am making this point as an active trade unionist and sponsored member of the Amalgamated Union of Engineering Workers. The right hon. Gentleman must realise that trade unionists in particular regard the emergency regulations as being aimed at their activities. It is very difficult for trade unionists to understand the ordinary law, but when emergency regulations are introduced in addition to ordinary law the position becomes even more confused. The concern that has been shown by several hon. Members demonstrates that trade unionists want the right hon. Gentleman to indicate exactly where they stand.
If he is a wise man, the right hon. Gentleman will give that guidance because he must look, as well as to the emergency regulations, to a possible solution of the disputes which have, according to the Government, brought the emergency about. Trade unionists feel that the Government have used the law against them. I am not saying that the Government have done so; I am saying that trade unionists believe that they have.
Incidents such as that which took place in Colchester early in November—under, I presume, the existing law—lead to a great deal of anxiety among not only the 24 trade unionists involved but other trade unionists throughout the country, including the executive of my union, which asked me to raise the matter in Parliament to find out how it was that ordinary, peaceful trade unionists, law-abiding and on a perfectly proper demonstration, were taken into custody when they returned to their homes by bus, kept in custody for a considerable time, had their homes searched—and all for no apparent reason, other than that


one of them was suspected of having something to do with the fire at Woolworth's.
This sort of incident leads to trade unionists feeling that laws are being introduced specifically against them. The right hon. Gentleman must make it clear that this is not the case. If he wants trade unionists to co-operate with the Government's future efforts to overcome the emergency, he must make it clear that the Government are prepared to cooperate with trade unionists, explain the law to them, and not use it against them unfairly. If he tells us that that is the stand that the Government will take, I shall be prepared to support him in getting the emergency regulations extended, but not otherwise.

10.59 p.m.

Mr. Charles Loughlin: I take this opportunity to ask the Secretary of State to deal with a question posed to me by a firm in my constituency. Meredith's is a small firm which has agreed with the union so to reduce the temperature in the factory as to ensure that no extra oil will be used in running its private generator for five days a week instead of three.
I understand the objection to working a five-day week when it is necessary to use additional oil for the generator, but, where no additional oil is involved, will the Government make provision for small firms to work a five-day week, lest they have to go out of business?

11.0 p.m.

The Secretary of State for the Home Department (Mr. Robert Carr): As are all Home Secretaries on these occasions, I am in a difficulty because, although the Home Secretary of the day is responsible for the making of emergency regulations, his right hon. and hon. Friends in other Departments are responsible for using them. It is a difficult if not impossible task for a Home Secretary to reply to questions that concern the Department of Trade and Industry and other Departments, so I hope the House will be reasonably tolerant with me.
In reply to the question asked by the hon. Member for Gloucestershire, West (Mr. Loughlin), my hon. Friend the Minister for Industry, who has been listening, tells me that earlier this evening he signed an order which allows private generators

to be used in industry and commerce with their normal allocation of oil but with no extra allocation. I hope that will help the hon. Gentleman and many other hon. Members who have not spoken tonight but have had similar worries about firms in their constituencies.
The hon. Member for West Ham, North (Mr. Arthur Lewis) and my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) addressed themselves to Regulation 21. I do not want to appear to ride out on a technicality but, in making my statement last week about the renewal of these regulations, I went out of my way to point out that although there had not been time to remove from the regulations certain of these matters, many of them were now covered in the Fuel and Electricity (Control) Act, which Parliament has just passed, and that my right hon. Friend would operate in these areas under that Act and not under the emergency regulations. Therefore, strictly speaking, the matters to which the two hon. Members object, or wish to be included, come not under the regulations but under the Act. I repeat that I am the Home Secretary and not the Secretary of State for Trade and Industry, and I hope that hon. Members will forgive me for not having answered their points in detail.
My hon. Friend the Under-Secretary of State for Trade and Industry listened to all that the hon. Member for West Ham, North had to say, and I know that he will take it seriously. The object of having powers at a time of difficulty is to try to ensure that priority users are satisfied. It is not always easy to succeed, but that is one of the objects of having these powers.
I accept that paraffin oil is a most important material for many people, and that for many poorer people it is a vital commodity. I understand that, generally, the supply has been fairly good but that there are some areas, including certain parts of London and East Anglia, where the supply has been difficult. I have been told that I can assure the House that my hon. Friend the Under-Secretary of State for Trade and Industry will do everything he can to improve the supply in areas where there has been difficulty. The same powers exist for paraffin as those which exist for petrol. I am sure that the House will forgive me for not


being able to give a figure. If there is any evidence of profiteering my right hon. Friend would like to know about it. He has powers to take action.
I turn to the wider issues which were raised by my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies). I accept that he takes a strong view and that he has strong arguments for the view which he takes. I can assure him that my right hon. Friend's decision has nothing to do with morals. He is not seeking to obstruct one form of activity and to encourage another or at least not to obstruct another on the basis of morals. Rightly or wrongly, he has acted on the basis of the need to conserve fuel of all kinds and to do so in a way which, as far as possible, is acceptable to the public.
The Government have taken the view that floodlighting, per se, should be banned. Floodlighting is a fairly large user of electric power. It is used, by and large, for sports which, in the past, have been daylight sports, or which can be daylight sports. We have taken the view, at a time of a fuel shortage and a need to restrict the use of electricity, that floodlighting should not be used to enable sports to continue which, by their nature, are traditionally conducted or could be conducted in daylight.
I accept that there is an argument that those people who have generators and have accumulated fuel for a long time should be able to use it. However, a difficult issue of judgment arises. We have felt—and I accept that this is a matter of judgment—that it would be offensive to many people—for example, housewives restricted in the use of electricity and people working nearby who are restricted in the number of hours that they can work—to see floodlighting used for sports activities, no matter what the source.
I accept that it is a difficult decision, but it was on the basis which I have described and not on a moral judgment on the superiority and desirability of some forms of activity and the moral inferiority of others, such as greyhound racing that the matter was decided.
I accept that many activities cannot go on except indoors. It would be wrong to imagine that they have escaped restrictions.

They are restricted in the amount of heating which they can use. It is not true to say that they have escaped. They are not being allowed to continue for a moral reason. They are being allowed to continue under restriction. They are using less power than hitherto. That is because we believe that it is important for society, as far as possible, to have open to it its traditional forms of activity and leisure. We believe that these other activities can be conducted in daylight without using scarce power.

Mr. Rees-Davies: May I put two matters to my right hon. Friend which shatter his argument? I used to be a great lawn tennis player, indoors. Anyone engaging in that sport has to have floodlighting. Floodlighting indoors is no different from floodlighting out of doors, yet I may play tennis indoors but I cannot go greyhound racing out of doors.
My second point is that this is a totally moral judgment. If I am able to provide all the necessary electricity because I have conserved sufficient fuel with which to generate it I am not asking my right hon. Friend for anything. Therefore, the only judgment which he can pass upon me is a moral one. My right hon. Friend says that an old woman living nearby might complain. What my right hon. Friend is saying is that she might complain because she is jealous because someone has been far-sighted enough to provide these facilities. It is a moral judgment, just as it is a moral judgment when deciding whether to play lawn tennis indoors under floodlighting or go greyhound racing under floodlighting out of doors.

Mr. Carr: I must repeat that I am not the Minister responsible. As far as I know, floodlighting for indoor tennis will be as much forbidden as for any other sport indoors. I do not think that that point arises.
I accept that a moral judgment is implied in being concerned about what other people will think. What I meant to say was that there was no moral judgment in thinking that greyhound racing was morally bad whereas the theatre, the cinema, or the bingo hall was morally good. In that sense there is no moral judgment.
As for Weatherby's and horse racing, I understand that the secretary made it clear in a radio programme today that


although there will be difficulty it will be possible to produce the Racing Calendar on a three-day operation.

Mr. Rees-Davies: I have in my possession a letter from Simon Weatherby, which I have passed to the Secretary of State for Trade and Industry and to six other Ministers, in which that statement is contradicted. He tells me that Weatherby's can operate only on Monday, Tuesday and Wednesday, and that it cannot print and publish the Racing Calendar, which is crucial to racing, unless it can publish on Friday and Saturday. Incidentally, the letter has also been sent to my right hon. Friend, but it has probably not reached him yet. It has been sent to the Secretary of State for Trade and Industry. It was posted on the board this afternoon. It is not true that it can continue to operate. That is the view of those concerned with the management of racing.

Mr. Carr: I shall ask my right hon. and hon. Friends at the Department of Trade and Industry to listen carefully to what my hon. Friend the Member for Isle of Thanet says, but I believe that a spokesman for Weatherbys said on the radio today that they could manage, even though with difficulty and for a short time. But I will have that matter looked into.
The hon. Member for Oldham, East (Mr. James Lamond) asked what action we had taken. Under the new regulations taken last week, so far we have taken no new action. Under the previous regulations, which lasted for the month until last week, we took action to control floodlighting, the amount of heating, and so forth, and the allocation of oil and petrol supplies, and we imposed the 50 m.p.h. speed limit, and so on. Those actions are now carried on under the Fuel and Electricity (Control) Act and not under the emergency regulations. Therefore, the emergency regulations are not being used at all now, but they were used in the first month. The main reason why we feel that we need them over the next few weeks may be in connection with certain transport services. However, I repeat that we shall not use them unless we have to do so.
I assure the hon. Member for Oldham, East that the Government have no intention of using the law against trade

unionists. He fairly said that it might not be the case, but he was reporting what people felt about the situation. We shall do all that we can to take away that feeling. I cannot do more than give that assurance. I appreciate the feelings that were aroused by the Colchester incident, to which the hon. Gentleman referred.
In this context, I think that I am entitled to say today, when, alas, we have had further bomb incidents in this country, that the trouble at Colchester was potentially a question of another bomb. When we are looking for people who may be planning and carrying out that kind of activity we must be prepared to have our affairs inquired into far more than would normally be acceptable. If I were a member of a coach party I hope that I would understand if, in those circumstances, I was examined by the police, but I might be rather angry if we were not living—temporarily, I trust—in that kind of context. I believe that in that situation the majority of people would think it right for the police to make inquiries on a scale—and, perhaps in an intrusive way—that would not normally be acceptable as their practice.
One of the evils that terrorists bring into society is that by their very methods they draw people who love liberty and are great defenders of civil rights into having to allow things to happen simply to protect themselves against terrorism of this kind. Without going into a great dissertation, I repeat my assurance that we do not intend to operate the law against trade unionists.
The hon. Member for Paddington, North (Mr. Latham) said that these regulations might be all right on a once-in-a-lifetime basis, but not if they had to be used seven times in three and a half years. What we have needed seven times in three and a half years has been the ability to use them. Luckily, we have had to use them only to a small extent in those seven months.
The greater use of these powers can be said to be the fault of a particular Government. However that may be, I believe that it is also part and parcel of a basic change not only in conditions, but in the tempo in industry whereby, in a modern technological society, small groups of people can threaten the very


life of a community in a way which was not possible until recently. Indeed, the basic safeguard is that no Government can ask for these emergency powers unless they can satisfy the House that they are required to deal with
events of such a nature as to be calculated, by interfering with the supply and distribution of food, water, fuel or light, or with the means of locomotion, to deprive the community, or any substantial portion of the community, of the essentials of life.
That is the basic condition before one can ask for these or any other regulations to be made. Given that basic condition, I do not think that one can do with much less than the regulations that we have. Nevertheless, the job of the House of Commons is to be critical about this sort of thing, and I do not object to that basic question being asked.

Mr. Latham: I think that the right hon. Gentleman has understood the burden of my argument, which is that if emergency powers are to be used so often, for whatever reason, one should look seriously at them. I draw his attention to Regulation 20, the significance of which escapes me. It says that:
Any sewerage authority may … discharge … foul … water into any natural or artificial stream, watercourse, canal, pond or lake. …
The right hon. Gentleman will remember that, in the Queen's Speech, we were told:
My Government will lay before you measures providing for greater control of environmental pollution.
A fortnight later we have this regulation. Why?

Mr. Carr: I shall not attempt to give the reason for a particular regulation at this time of night, but I take the point that it is right that these regulations should be looked at critically.
This brings me to the last point, and it was also the first point, since it was raised by the hon. Member for Barrow-in-Furness (Mr. Booth), as well as by my hon. and learned Friend the Member for Nelson and Colne (Mr. Waddington) and the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray). Here we see Parliament doing its job. These regulations are now being looked at in detail—in a way in which, perhaps, they were not before—by our

Joint Committee on Statutory Instruments. This shows the value of Parliament's having Committees of this kind.
I must make it clear that the wording which is challenged, in Regulation 32 particularly, is not peculiar to this set of regulations. I am advised that exactly the same words have been used in every set of regulations since 1949, introduced by successive Governments, and they have never before been queried. I am not complaining about that. It is right that they should now be queried, and the Joint Committee is serving Parliament by querying them.
Hon. Members have raised a difficult and complex legal point. I do not think that I can undertake a review of the regulations in this four-week period, but I shall consult seriously with the Law Officers and bear this point in mind should we, unfortunately, ever have need for the regulations again. Meanwhile, I can assure the House that it is not the Government's intention to use these regulations to outlaw or to prevent anything that has traditionally been regarded as a legitimate trade union activity. I hope that the House will take that assurance from me, accept that it is a complicated legal point, leave me to consult the Law Officers and take the outcome of those consultations into account if, unfortunately, we ever have to have further regulations in future.

Question put and agreed to.

Resolved,
That the Regulations made by Her Majesty in Council under the Emergency Powers Act 1920 by Order dated 12th December 1973, a copy of which was laid before this House on 12th December, shall continue in force, subject however to the provisions of section 2(4) of the said Act.

Orders of the Day — CROFTING REFORM (SCOTLAND) BILL

Order for Second Reading read.

Ordered,

That the Bill be referred to the Scottish Grand Committee.—[Mr. Rossi.]

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]

POLICE CONSTABLE T. C. POWELL

11.24 p.m.

Mr. Charles Loughlin: This afternoon the Home Secretary and the House paid tribute to the courage and efficiency of policemen involved in one of the latest bomb outrages. I think that all of us, individually, pay tribute to our policemen at some time. It is ironic that tonight I have to raise the case of a policeman who has been denied elementary justice by the Chief Constable of Gloucestershire and the Secretary of State for the Home Department.
Police Constable T. C. Powell, now attached to the Cinderford police station, has been a member of the Gloucestershire police force since November 1951. He was promoted to the rank of sergeant in 1966, and demoted to police constable in June 1972. That demotion arose from an incident to which I shall refer later. This man has been in the police force for 22 years. At a recent disciplinary hearing he was described, not by the defence, as being a "good average policeman".
On the night of 6th–7th May this man was off duty. With his wife, he spent the latter part of the evening at the Lydney Police Club. Lydney was the station to which he was then attached. In the club on that occasion were a number of police officers and a number of civilians, all of whom were on the premises legitimately. At about 1.20 a.m. on Sunday 7th May, a Superintendent Gwilliam, who was off duty, entered the club and is alleged to have charged persons present with drinking after hours, though there is not, and never has been, any suggestion that PC Powell or his wife were drinking at that time. It would be of interest to know why a superintendent who was off duty ever even called at the police club at that time on a Sunday morning.
Disciplinary proceedings were taken by the chief constable against PC Powell, PC Parfit and PC Handy. At the hearing on Wednesday 21st June PC Powell was demoted from the rank of sergeant by the chief constable. PC Parfit had his rate of pay reduced by one increment, and PC Handy was exonerated.

Let me make it absolutely clear that PC Parfit denied that he was drinking, and that that is borne out by other witnesses at the hearing.
I have read and re-read the transcript of evidence at these proceedings. The decisions on the basis of the evidence advanced were a complete travesty of justice. It is well known locally that Superintendent Gwilliam has threatened to, and was clearly out to, break Sergeant Powell, as he then was. They had clashed time and again. Gwilliam's evidence was, in my view and in the light of the evidence of other witnesses, a pack of lies from beginning to end. He was intent solely on the destruction of PC Powell. Even in answer to the first material question at the hearing, Gwilliam said
I went to the police station at Lydney. Outside the station in Bathurst Road I saw Sergeant Powell's car parked near the rear entrance.
That fact had nothing to do with the hearing, but it is a good indicator of the superintendent's attitude of mind, in particular to Sergeant Powell.
In law there can be no offence in persons being on the premises of a registered club at any hour of the day or night. An offence can be committed only if alcohol is supplied or consumed outside the permitted hours. The basis of the two charges against PC Powell under the police discipline regulations was that he was present at a time when he knew that intoxicating liquor was being supplied and consumed illegally and that he, as the senior police officer present, took no action to uphold the law.
PC Parfit was found guilty of consuming beer, which he denies. I have already referred to that. The proof of the disciplinary charges rested upon the proof that breaches of the law had taken place. No person, civilian or otherwise, present at the time of the alleged offence, including PC Powell and PC Parfit, has ever appeared before a court of law in connection with these alleged offences.
The Minister will know that Home Office Circular 108/1972 clearly lays down that chief constables have no discretion in deciding what offence alleged to have been committed by a police officer shall be referred to the Director of Public Prosecutions. The offences must


always be referred, even minor cases or traffic offences. I want to know why these cases were not referred to the Director of Public Prosecutions.
Is the Chief Constable of Gloucester a law unto himself? Why were no charges brought against the civilians who were in the club at the time and were alleged to be drinking according to Superintendent Gwilliam's evidence? If the chief constable took the view that there was insufficient evidence to secure a conviction against the civilians, according to Superintendent Gwilliam's evidence, why did he, in effect, prosecute by disciplinary action two of his own officers and find them both guilty on the basis of some evidence by the same witnes while there was certainly no corroborative evidence from any of the other witnesses at the hearing?
The evidence of Superintendent Gwilliam was so puerile and stupid that he claimed that he took no action against the civilians, and did not even take their names and addresses, because—and I quote—he "feared physical violence". There were eight people in the club—four police officers, the club steward, two civilians and a policeman's wife, and, to quote him Superintendent Gwilliam was "fearful" of "physical violence". On the evidence of this man, and of this man alone, Sgt. Powell was broken. He lost his position, his pride and his future. I estimate—and it has been so estimated by others besides myself—that he lost in wages and pension values about £6,000—this for a man who had previously served 20 years' good and faithful service in the police force.
With the full backing of the Police Federation, an appeal was launched with the Home Secretary. Having seen a copy of the appeal statement, I cannot see on what grounds it could possibly have been rejected. The Minister has not seen fit to give his reasons. Nor did he use his powers to order an oral inquiry when Gwilliam could have been cross-examined on oath. What is most disquieting is the fact that new evidence was available to the Home Secretary which was not available at the hearing before the chief constable. The names of three additional witnesses, each of whom were senior members of the Gloucestershire Police

Force, each prepared to give evidence of Superintendent Gwilliam's fixation about closing the Lydney Police Club, one of whom could have thrown light on the superintendent's mental instability, were submitted to the Home Secretary. The Home Secretary refused to take that evidence. No statements were taken from those officers, nor were they ever interviewed. They were, and are, senior members of the force. Their evidence, I understand, would have been based upon reports submitted to the chief constable prior to the incident at the police club, arising out of which the action to which I have referred was taken.
After discussing the case with the Minister of State, along with my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris), who has collaborated with me throughout, I interviewed the chief constable. I went to try to get a solution to the case without undue publicity, and I made some suggestions to the chief constable about how this could be done. But I also asked that I should be allowed to interview the three officers concerned in the presence of a senior officer nominated by the chief constable. I was refused such permission.
If the most hardened criminal in this country, charged with, say, grievous bodily harm or even murder, is convicted at a lower court, no matter what his police record may be, if additional evidence is subsequently forthcoming to enable him to appeal, no impediment of any kind is placed in his way to secure the presentation of that additional evidence. If this principle applies to criminals, it must surely equally apply to a policeman whose job is to protect society from such people. Yet both the chief constable and the Home Secretary can deny with impunity natural justice to a man who, far from being a criminal, can only be described as a very good police officer.
It really is shocking if we have a situation in which police officers who do a really first-class job are placed in a less favourable position than the most miserable criminal. It is shocking, and a pretty bad scandal.
I know that the Minister of State has seen the statement of case. I have not


attempted to go through all the evidence because it would take me an hour—although I should be delighted to do so. I have simply stated the bare bones of the case—the question of evidence which was faulty in law; the fact that the chief constable misdirected himself; that there was no corroboration of any kind of the evidence of the superintendent who, we claim, had a fixation about closing this club—indeed, we believe that he was suffering from mental instability. It was on the evidence of that man, and that man alone, that P.C. Powell was demoted.
I claim that the Minister should have afforded an opportunity for P.C. Powell to test the new evidence which was submitted. Even at this late stage I beg the Secretary of State to examine this case again, to let the additional evidence be examined and let justice not only be done but be seen to be done. This case and the refusal of the Minister to give reasons for his decisions have caused great disquiet and discontent among police officers.
I hope that my hon. Friend the Member for Wythenshawe will be able to catch your eye for two minutes, Mr. Speaker, and I hope also that the Minister of State will take my plea to the Secretary of State and ask him to reconsider this case.

11.37 p.m.

Mr. Alfred Morris: This is my hon. Friend's debate. The House will agree that he has made a powerful case, which I hope the Minister of State will want to consider most carefully. I trust that he will also now be able to respond favourably at least to some of the arguments that my hon. Friend adduced. As the Minister knows, representative people in the Police Federation have expressed deep concern about the case of my hon. Friend's constituent. In my capacity as Parliamentary Adviser to the Police Federation of England and Wales, I have myself made representations about the case to the Secretary of State.
There have been many extremely disquieting cases of disciplinary action which, in the view of officers of the federation, clearly merited a review tribunal. The Minister of State will be aware that there has not been a review tribunal for several years. There are

about 30 disputed cases a year. Thus there have been a disturbingly large number of disputed cases since there was last a review tribunal. There is cause here for legitimate concern, which the Minister of State would be unwise to ignore.
In this case my hon. Friend is simply asking the Minister to look again at the evidence available to him. There are strong grounds for his doing so.
I am grateful to my hon. Friend for the kindly reference he made to my interest in this case.

11.40 p.m.

The Minister of State, Home Office (Mr. Mark Carlisle): The hon. Member for Gloucestershire, West (Mr. Loughlin) has raised this evening what is always an unfortunate case; that is, one in which a police officer who has risen to the rank of sergeant has been found guilty in disciplinary proceedings of offences of discreditable conduct and neglect of duty, and his chief constable has considered it necessary to reduce him to the rank of constable. As I said, cases of this kind are always unfortunate and regrettable when they relate—as this one does—to a man who, as the hon. Member for Gloucestershire, West has reminded us, has had 22 years' service in the force.
Of course I am grateful to the hon. Member for his general comments at the opening of his speech about the police force of this country, but I think that, on reflection, he will agree that some of the language which he chose to use tonight about the hearing of this disciplinary matter, both in front of the Chief Constable of Gloucestershire and on appeal before my right hon. Friend the Home Secretary, was both unfortunate and unjustified, and I must say to the hon. Gentleman, who, as he said, came to see me about this case, that I strongly resent phrases such as "a complete travesty of justice" which he used. Under the cover of the privilege of this House, he has chosen to make the most vicious and most virulent attack that could possibly be made upon the character of a senior member of the police force of this country.
I will remind the hon. Member of what he said, since I made certain notes. He said that Superintendent Gwilliam's evidence was a pack of lies, not that he


was mistaken or that he may have misunderstood what he saw. He said that his attitude was both puerile and stupid, and I think he said twice that he questioned the superintendent's mental stability. I would remind the hon. Gentleman that he has chosen to make those remarks about a serving superintendent in the force of the county of which he represents a part in this House. I only hope that he has the courage to repeat those words outside this House, and that he has the basis to justify the comments that he has made.
The task of the Home Secretary, the task of junior Ministers, indeed the task of the Department in acting as the final court of appeal in matters of police discipline, is never easy. But we do our best. We attempt to do justice as we see it. We attempt to review the hearing before the chief constable, and to assess what we believe is the justice of the case. But, of course, in looking at cases of this kind we take into account that at the hearing where an officer is represented the chief constable, with all the experience of his force, has the opportunity of assessing the individual officers who give evidence before him, and the Chief Constable of Gloucestershire made it quite clear, having heard all the conflicting evidence and the cross-examination in this case, that he chose to accept the word of Superintendent Gwilliam. So I do not see that there was any basis on which the Home Secretary would have been justified in going against the view which the chief constable took.

Mr. Loughlin: Can the Minister of State tell me why, if there was a breach of the law in the case of P.C. Powell or P.C. Parfit—and it will be remembered that P.C. Parfit was charged with consuming beer—the matter was not referred to the Director of Public Prosecutions by the chief constable?

Mr. Carlisle: I shall come to that in a moment. I was still dealing with what I considered to be the wholly unjustified attack on the integrity of the superintendent by the hon. Member.
May I remind the hon. Gentleman of the events leading up to these charges, which happened as long ago as May 1972, as he said, at the police club in Lydney. Sgt. Powell, as he then was,

was present in the club—and there is no dispute about this—with his wife from about 10.30 until Superintendent Gwilliam entered the club at 1.20 a.m. The licensed hours of that club ended at 11 p.m., and the charge of discreditable conduct against Sgt. Powell was based on the allegation that he was present in the club with members of the general public and two members of the force junior to himself in rank and at a time when intoxicating liquor was being consumed outside permitted hours.
The evidence that consumption was taking place in the Lydney Police Club on the evening in question not at just after 11 p.m. but two hours and 20 minutes later was the evidence given by Superintendent Gwilliam, who testified at the hearing that when he entered the club one of the police constables was in the act of drinking a glass of beer. That was disputed, I accept, but there was never any dispute that at that stage there was a full pint of beer before Parfit and a half pint in the vicinity of other people in the club. The "neglect of duty" charge was based on the fact that the then Sgt. Powell failed to take appropriate action to stop breaches of the law taking place and, in particular, to intervene when liquor was supplied to one of the civilians.
I accept that the evidence about the sale of liquor was in some respects vague, but the steward confirmed that he had served drinks out of hours and thought that the last round was served at about 11.45 in the evening. The hon. Member may laugh, but even if the steward was believed, and he was a witness on behalf of Sergeant Powell, that would mean liquor was sold three-quarters of an hour after licensing hours had ended. After hearing the evidence the chief constable not only accepted Superintendent Gwilliam's evidence that liquor was being consumed by one of the constables, but was satisfied from the evidence as a whole that in a room 27 feet by 17½ feet it was inconceivable that liquor could have been sold and consumed after the licensing hours had finished at 11 o'clock without the sergeant's knowledge when the sergeant himself had agreed that he was present on the premises. Therefore, the chief constable found the sergeant guilty.
The hon. Member asked why criminal proceedings were not taken in this matter.


I accept, of course, that there is feeling on behalf of the Police Federation, to which the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) has referred, that cases in which what is alleged against a police officer is criminal conduct should be subject to criminal rather than disciplinary proceedings so that the accused may have the same protection by way of burden and standard of proof as would a member of the public charged in a criminal court.
In Constable Powell's case it has been suggested that the chief constable should have reported the facts to the Director of Public Prosecutions for prosecution as an offence under the Licensing Act against the others who were present in the club at the time. The law provides that if an investigation arises from a complaint by a member of the public the chief constable must send a report to the Director of Public Prosecutions unless he is positively satisfied that no criminal offence has been committed. In other cases—that is, where the initiative for investigation has come from entirely within the force—it is a matter entirely for the chief constable to decide whether or not the Director of Public Prosecutions should be consulted.
I believe that it would be utterly unreasonable—certainly from the point of view of the officer concerned—to have a situation in which what might appear from an internal investigation to be a breach of the law that would justify, within a disciplined service, a disciplinary charge against an officer, should automatically be required to be referred to the Director of Public Prosecutions and taken up as a criminal prosecution with the grave consequences that might arise for that officer.
I remind the hon. Gentleman that Sergeant Powell, as a result of those disciplinary proceedings, was demoted to the rank of constable. If criminal proceedings had been taken against an officer concerned in a case of this nature and a conviction had been recorded, it would be almost inevitable that that officer would be required to resign from the force. It is not necessarily, as the hon. Gentleman seems to think, in the interests of any individual member of a disciplined force that whenever a technical criminal offence may be committed he should be proceeded against for a

criminal offence rather than the offence being treated as a matter of discipline.

Mr. Loughlin: Is the regulation giving permissive powers to the chief constable part of Circular 108 to which I referred?

Mr. Carlisle: I cannot give that answer without notice, but what I can tell the hon. Gentleman is that we have issued a circular to chief constables recommending that whenever the possibility arises of a police officer being charged with a criminal offence the case should nevertheless be referred to the Director of Public Prosecutions for advice, if it is not of a trivial nature, although the complaint has come up as an internal matter.
What I am saying is that in such a case as this, of a breach of the licensing laws, one must weigh in the balance whether it is right that the matter should be dealt with by the full weight of the criminal law, with prosecution and all that would follow from conviction, or should be dealt with as the chief constable chose to deal with it in this case; namely, as a disciplinary matter against two members of his force whom he was able to deal with in that way, without requiring them to resign from the force.
Moreover, even if a case is referred to the Director of Public Prosecutions for advice, that does not mean that the result will be either the institution of criminal proceedings or no action at all. Where the conduct complained of has not adversely affected anyone outside the police service and there are no circumstances which appear to warrant criminal proceedings, the Director of Public Prosecutions may suggest that the matter would be better dealt with by disciplinary proceedings.
That does not mean that the accused officer has to accept a second-class standard of justice. The elements of any disciplinary offence may be different from those of the relevant criminal offence, but the standard of proof is no lower in disciplinary proceedings. I cannot accept, as the Police Federation urges, that all allegations against police officers which could form the basis of criminal charges should be dealt with in the criminal courts. I do not necessarily believe that that would be in the interests of the officers concerned. But I understand that this whole issue is now being considered


by a working party on the police discipline code, on which the Federation is represented along with associations representing police authorities, chief officers and superintendents.
The hon. Member for Manchester, Wythenshawe asked why a tribunal was not set up in this case. Whether a particular case is of such a nature that it can properly be determined without the taking of evidence by a tribunal is a matter for judgment in each case. In

this case, the Home Secretary decided that there was no justification for a tribunal—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at six minutes to Twelve o'clock.